Kansas 2023-2024 Regular Session

Kansas House Bill HB2744 Compare Versions

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1	1	Session of 2024
2	2	HOUSE BILL No. 2744
3	3	By Committee on Commerce, Labor and Economic Development
4	4	Requested by Rachel Willis on behalf of the Department of Commerce
5	5	2-7
6	6	AN ACT concerning economic development; enacting the transformation
7	7	of passenger and freight vehicle industry act; relating to tax and other
8	8	incentives for projects in specified industries or for a national corporate
9	9	headquarters with specified job requirements of at least 250 new
10	10	employees and specified capital investment requirements; providing for
11	11	a refundable income, privilege and premium tax credit for a portion of
12	12	any specified capital investment requirement; retention of certain
13	13	payroll withholding taxes; sales tax exemption for project construction;
14	14	establishing the transformation of passenger and freight vehicle
15	15	industry act new employee training and education fund; amending
16	16	K.S.A. 2023 Supp. 79-3606 and repealing the existing section.
17	17	Be it enacted by the Legislature of the State of Kansas:
18	18	New Section 1. (a) This act shall be known and may be cited as the
19	19	transformation of passenger and freight vehicle industry act.
20	20	(b) For purposes of the transformation of passenger and freight
21	21	vehicle industry act:
22	22	(1) "Act" means the transformation of passenger and freight vehicle
23	23	industry act, sections 1 through 8, and amendments thereto.
24	24	(2) "Applicant" means a legal entity seeking to certify as a qualified
25	25	firm for the economic development benefits pursuant to this act.
26	26	(3) "Commence investment" means to begin to invest, with action
27	27	being directly connected to documentation describing the project
28	28	previously submitted to the department.
29	29	(4) "Commencement of commercial operations" means the date, as
30	30	determined by the secretary, that the qualified business facility is first
31	31	available for use by the qualified company or first capable of being used
32	32	by the qualified company in the revenue-producing enterprise in which the
33	33	qualified company intends to use the qualified business facility.
34	34	(5) "Commitment to invest" means one or both of the following:
35	35	(A) The qualified company relocates assets that it already owns to
36	36	Kansas from an out-of-state location; or
37	37	(B) the qualified company enters into a written agreement with a third
38	38	party to acquire assets that provides either party with legally enforceable
39	39	remedies if the agreement is breached.
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75	75	(6) "Construction" means construction, reconstruction, enlarging or
76	76	remodeling for the purpose of building or establishing a qualified business
77	77	facility.
78	78	(7) "County median wage" means the median wage in the county
79	79	where the qualified company intends to employ new employees as
80	80	reported by the department of labor in its annual Kansas wage survey for
81	81	the previous year.
82	82	(8) "Department" means the department of commerce.
83	83	(9) "Electric motor vehicle" means a passenger or freight motor
84	84	vehicle primarily powered by an electric motor that draws current from
85	85	rechargeable storage batteries, fuel cells, photovoltaic arrays or other
86	86	sources of electric current and may include an electric-hybrid vehicle.
87	87	(10) "Facility" means:
88	88	(A) Any factory, mill, plant, refinery, warehouse, headquarters or
89	89	other building or buildings in proximity to each other. For purposes of this
90	90	subsection "building" means a structure within which individuals are
91	91	customarily employed or that is customarily used to house machinery,
92	92	equipment or other property;
93	93	(B) the land on which such building or buildings is located; and
94	94	(C) machinery, equipment and other real or tangible personal property
95	95	located at such land or within such building or buildings and used in
96	96	connection with the operation conducted at such land or within such
97	97	building or buildings.
98	98	(11) "Headquarters" means a qualified business facility that meets the
99	99	following conditions:
100	100	(A) The main activity at the qualified business facility is providing
101	101	direction, management or administrative support for the operation of
102	102	multiple company-owned worksites or facilities that are engaged in
103	103	qualified activities and in which the applicant has an ownership interest
104	104	greater than 50%; and
105	105	(B) the function of the qualified business facility is not dependent on
106	106	its geographical location.
107	107	(12) "Hydrogen-powered vehicle" means a passenger or freight motor
108	108	vehicle that uses hydrogen as a significant source of motive power, either
109	109	through a fuel cell or internal combustion.
110	110	(13) "Metropolitan county" means the county of Douglas, Johnson,
111	111	Leavenworth, Sedgwick, Shawnee or Wyandotte.
112	112	(14) "New employee" means a qualified business facility employee
113	113	who is newly employed in Kansas by the qualified company in the
114	114	qualified company's business operating in Kansas during the taxable year
115	115	for which benefits are sought. Qualified business facility employees
116	116	performing functions directly related to a relocating, expanding or new
117	117	business facility, office, department or other operation shall be considered
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161	161	"new employees."
162	162	(15) "On-the-job training" means training situations during which a
163	163	product or service that can be sold or used in internal operations is
164	164	generated.
165	165	(16) "Qualified activities" means engaging in industries that include,
166	166	but are not limited to, the following:
167	167	(A) Any industry in the following NAICS code groups, sectors or
168	168	subsectors:
169	169	(i) Subsector 336; or
170	170	(ii) industry group 335910; or
171	171	(B) research and development operations.
172	172	(17) (A) "Qualified business facility" means a facility that is located
173	173	within Kansas and is for use by a qualified company in the operation of a
174	174	revenue-producing enterprise.
175	175	(B) A facility shall not be considered a "qualified business facility" in
176	176	the hands of the qualified company if:
177	177	(i) The qualified company's only activity with respect to the facility is
178	178	to lease the facility to another individual or business or the qualified
179	179	company does not otherwise use the facility in the operation of a revenue-
180	180	producing enterprise. If the qualified company employs only a portion of
181	181	the facility in the operation of a revenue-producing enterprise that portion
182	182	may constitute a "qualified business facility" if all other requirements with
183	183	respect to such portion are met; or
184	184	(ii) the facility was acquired or leased by the qualified company from
185	185	another individual or business and the facility was used, either
186	186	immediately prior to the transfer of title to the qualified company or to the
187	187	commencement of the term of the lease to the qualified company, by any
188	188	other individual or business in the operation of a revenue-producing
189	189	enterprise that is the same or substantially the same, as determined by the
190	190	secretary, as the revenue-producing enterprise pursued by the qualified
191	191	company at the facility.
192	192	(18) (A) "Qualified business facility employee" means an individual
193	193	employed by the qualified company at a qualified business facility project
194	194	site, employed full time and scheduled to work for an average minimum of
195	195	30 hours per week and employed for at least three consecutive months on
196	196	the last day of the period covered by a department of labor quarterly wage
197	197	report and unemployment tax return.
198	198	(B) "Qualified business facility employee" does not include an
199	199	employee at a qualified business facility project site who has not been
200	200	employed for three consecutive months.
201	201	(19) "Qualified business facility investment" or "qualified
202	202	investment" means the value of the real and tangible personal property,
203	203	except inventory or property held for sale to customers in the ordinary
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247	247	course of the qualified company's business, that constitutes the qualified
248	248	business facility or that is used by the qualified company in the operation
249	249	of the qualified business facility, including such property used for
250	250	administrative or managerial functions, during the taxable years for which
251	251	the credit allowed by sections 2 and 3, and amendments thereto, is
252	252	claimed. "Qualified business facility investment" does not include any
253	253	building, land or other real or tangible personal property that is granted,
254	254	leased or transferred to the qualified company without cost to the qualified
255	255	company. For purposes of calculating the qualified business facility
256	256	investment, real or tangible personal property that is granted, leased or
257	257	transferred to the qualified company at a cost of less than fair market value
258	258	shall be reduced in value, by the difference in cost to the qualified
259	259	company and fair market value. The value of such property during such
260	260	taxable year shall be:
261	261	(A) Such property's original cost if owned by the qualified company;
262	262	or
263	263	(B) eight times the net annual rental rate if leased by the qualified
264	264	company. The net annual rental rate shall be the annual rental rate paid by
265	265	the qualified company less any annual rental rate received by the qualified
266	266	company from subrentals. The "qualified business facility investment"
267	267	shall be determined by dividing by 12 the sum of the total value of such
268	268	property on the last business day of each calendar month of the taxable
269	269	year. Notwithstanding the provisions of this paragraph, for the purpose of
270	270	computing the credit allowed by section 3, and amendments thereto, in the
271	271	case of a "qualified business facility investment" in a qualified business
272	272	facility that existed and was operated by the qualified company or a related
273	273	taxpayer prior to the investment, the amount of the qualified company's
274	274	investment shall be computed as follows: Such investment amount shall be
275	275	reduced by the average amount, computed as provided in this paragraph,
276	276	of the investment of the qualified company or a related taxpayer in the
277	277	facility for the taxable year preceding the taxable year in which the
278	278	"qualified business facility investment" was made in the facility.
279	279	(20) "Qualified company" means a for-profit business establishment,
280	280	subject to Kansas income, sales or property taxes, that is:
281	281	(A) Engaged in one or more of the following qualified activities, as
282	282	defined by the secretary of commerce:
283	283	(i) Electric or hydrogen-powered motor vehicle manufacturing;
284	284	(ii) battery manufacturing;
285	285	(iii) research and development operation; or
286	286	(iv) headquarters for any of the industries described in clauses (i)
287	287	through (iii);
288	288	(B) engaged in any industry or revenue-producing activity if seeking
289	289	benefits with respect to a qualified business facility that is the national
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333	333	corporate headquarters of the for-profit business establishment;
334	334	(C) a supplier of components, sub-assemblies, chemicals or other
335	335	process-related tangible goods, is located in Kansas and is owned by:
336	336	(i) An individual, any partnership, association, limited liability
337	337	corporation or corporation domiciled in Kansas; or
338	338	(ii) any business, including any business owned by an individual, any
339	339	partnership, association, limited liability corporation or corporation, even
340	340	if the business is a wholly owned subsidiary of a foreign corporation, that
341	341	operates in the state of Kansas for the purpose of supplying a qualified
342	342	company engaged in qualified activities as described in subparagraph (A);
343	343	and
344	344	(D) eligible for benefits under this act as determined by the secretary.
345	345	(21) "Research and development operation" means an operation that
346	346	is conducted solely to advance scientific and technical knowledge in any
347	347	qualified activity, as described in paragraph (19)(A).
348	348	(22) "Revenue-producing enterprise" means an enterprise that creates
349	349	revenue subject to tax liability in this state.
350	350	(23) "Residency in Kansas" means:
351	351	(A) Owning, renting or leasing real estate in Kansas with the intent to
352	352	make the real estate or any other real estate in Kansas an employee's
353	353	primary home; and
354	354	(B) engaging in a trade, business or profession within Kansas.
355	355	(24) "Secretary" means the secretary of commerce.
356	356	(25) (A) "Total payroll cost" means the payroll amount defined by the
357	357	department of labor as total wages on the quarterly wage report and
358	358	unemployment tax return. For a qualified business facility, "total payroll
359	359	cost" during the appropriate measurement period may be combined with
360	360	any pretax earnings in which an employee has elected to direct to a:
361	361	(i) Flexible-spending plan;
362	362	(ii) deferred compensation plan; or
363	363	(iii) retirement plan that includes earnings that the employee would
364	364	otherwise have received in the form of taxable wages had it not been for
365	365	the voluntary deferral.
366	366	(B) "Total payroll cost" does not include company-paid costs for
367	367	health insurance, dental insurance and any other employee benefits that are
368	368	not reported to the Kansas department of labor on the employer's quarterly
369	369	wage report and unemployment tax return.
370	370	(26) (A) "Training and education eligible expense" means the amount
371	371	actually paid for training and education of the group of employees, or
372	372	portion thereof, at any Kansas community college or technical college and
373	373	from which the qualified company expects to derive increased productivity
374	374	or quality.
375	375	(B) "Training and education eligible expense" includes instructor
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419	419	salaries, curriculum planning and development, materials and supplies,
420	420	textbooks, manuals, minor training equipment, certain training facility
421	421	costs and any other expenditure that is eligible under the Kansas industrial
422	422	training or the Kansas industrial retraining programs.
423	423	(C) "Training and education eligible expense" may include, subject to
424	424	maximum limits determined by the secretary:
425	425	(i) Wages of employees during eligible training; and
426	426	(ii) salaries of employee instructors.
427	427	(D) "Training and education eligible expense" does not include:
428	428	(i) Compensation paid to an employee trainee who is receiving on-
429	429	the-job training;
430	430	(ii) compensation paid to an employee during self-training, except for
431	431	time in which the employee is involved in activities related to an approved
432	432	computerized course of study;
433	433	(iii) bonus pay received as compensation related to the company's
434	434	financial performance or the employee's job performance, or both;
435	435	(iv) overtime pay, unless the employee is being paid at an overtime
436	436	rate while participating in eligible training;
437	437	(v) operations manuals and reference manuals, except that training-
438	438	specific manuals may be allowable;
439	439	(vi) training and education costs covered by moneys or grants
440	440	obtained from state, federal or other government-sponsored workforce
441	441	training programs; and
442	442	(vii) training and education costs that were paid to a non-Kansas
443	443	college or technical college or any other entity that is not a Kansas college
444	444	or technical college.
445	445	New Sec. 2. (a) There is hereby established the transformation of
446	446	passenger and freight vehicle industry program to be administered by the
447	447	secretary of commerce. The purpose of the transformation of passenger
448	448	and freight vehicle industry program is to attract businesses engaged in
449	449	electric motor vehicle and hydrogen-powered vehicle production industries
450	450	to build new business facilities and operations, research and development
451	451	operations or new national headquarters in Kansas and to encourage the
452	452	development of a Kansas-based supply chain for such enterprises.
453	453	(b) A qualified company or qualified companies that jointly meet the
454	454	requirements of this act may be eligible for the following incentives as
455	455	approved by the secretary:
456	456	(1) The investment tax credit pursuant to section 3, and amendments
457	457	thereto;
458	458	(2) retention of a percentage of total payroll tax pursuant to section 4,
459	459	and amendments thereto;
460	460	(3) reimbursement of a percentage of eligible employee training and
461	461	education expenses pursuant to sections 5 and 6, and amendments thereto;
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505	505	and
506	506	(4) a sales tax exemption for construction costs of a qualified
507	507	business facility pursuant to K.S.A. 79-3606, and amendments thereto, and
508	508	section 7, and amendments thereto.
509	509	(c) (1) To be eligible to receive an incentive listed in subsection (b), a
510	510	qualified company, or jointly in the case of two or more qualified
511	511	companies, shall meet the requirements of this act, including any
512	512	requirements or provisions specific to each such incentive, and any rules
513	513	and regulations of the secretary pursuant to this act and shall submit an
514	514	application to the secretary in the form and manner as required by the
515	515	secretary and that describes the proposed project and how the project
516	516	meets the purposes of this act. Two or more qualified companies may
517	517	jointly submit an application to meet the requirements of the act.
518	518	(d) If the application is approved by the secretary, the qualified
519	519	company or companies shall enter into a binding agreement with the
520	520	secretary that shall include the following terms and conditions to receive
521	521	and retain the benefits allowed under this act and such other terms and
522	522	conditions as the secretary may require. The qualified company or
523	523	companies shall agree to:
524	524	(1) Complete the project described in the application within five years
525	525	of the date as specified in the agreement with the secretary;
526	526	(2) hire a minimum of 250 new employees within five years from the
527	527	date specified in the agreement with the secretary;
528	528	(3) retain such new employees as specified in the agreement for a
529	529	period determined by the secretary;
530	530	(4) in the case of a qualified company that submits an application to
531	531	construct a qualified business facility for an electric or hydrogen motor
532	532	vehicle assembly operation project, make a qualified business facility
533	533	investment of at least $250,000,000 to be completed within five years of
534	534	such date as specified in the agreement with the secretary and commence
535	535	commercial operations within five years of either the commitment to
536	536	invest or a date specified in the agreement. This capital investment
537	537	requirement shall not apply to other eligible applicants; and
538	538	(5) commit to repayment of any benefit or benefits received,
539	539	connected to or associated with a term or a condition of the agreement that
540	540	has been breached as determined by the secretary and the forfeiture of any
541	541	such earned benefits and the suspension or cessation of such future
542	542	benefits for as long as the breach is not corrected.
543	543	(e) If requested by the secretary, prior to making a commitment to
544	544	invest in a qualified business facility, the qualified company or companies
545	545	shall submit a certificate of intent to invest in the qualified business
546	546	facility to the secretary in the form and manner required by the secretary,
547	547	including, if required, a date when investment will commence.
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591	591	(f) The secretary shall not enter into an agreement for benefits
592	592	pursuant to this act with any qualified company after December 31, 2026.
593	593	(g) (1) The secretary shall conduct an annual review of the activities
594	594	undertaken by a qualified company or qualified companies to ensure that
595	595	the qualified company or qualified companies:
596	596	(A) Remain in good standing with the state;
597	597	(B) remain in compliance with the provisions of this act, any
598	598	applicable rules and regulations adopted by the secretary and any
599	599	agreement entered into with the secretary pursuant to this act; and
600	600	(C) continue to meet the requirements for the benefits provided under
601	601	this act.
602	602	(2) The secretary of commerce shall certify annually to the secretary
603	603	of revenue that the qualified company or qualified companies meet the
604	604	criteria for designation as a qualified company or qualified companies and
605	605	are eligible for benefits. The qualified company or qualified companies
606	606	shall provide the information requested by the secretary reasonably
607	607	necessary to determine the qualified company or qualified companies meet
608	608	such criteria and are eligible for benefits. Such information shall be
609	609	confidential to the same extent as information provided to the secretary to
610	610	determine eligibility pursuant to K.S.A.74-50,131, and amendments
611	611	thereto.
612	612	(3) Confidential financial information, any trade secret or other
613	613	information that, if known, would place the qualified company or qualified
614	614	companies at a disadvantage in the marketplace or would significantly
615	615	interfere with the purposes of this act in the judgment of the secretary that
616	616	is obtained by the secretary under this section shall not be subject to
617	617	disclosure pursuant to K.S.A. 45-215 et seq., and amendments thereto, but
618	618	shall be made available to the division of legislative post audit upon
619	619	request. The provisions of this paragraph shall be construed as additional
620	620	to and not as a limitation on or replacement of any other provision of the
621	621	Kansas open records act or other law providing for confidentiality of such
622	622	information. The provisions of this paragraph shall expire on July 1, 2029,
623	623	unless the legislature reviews and reenacts such provisions pursuant to
624	624	K.S.A. 45-229, and amendments thereto.
625	625	(h) (1) The books and records concerning investments made, sales,
626	626	employment and wages of any employees for which the qualified company
627	627	or qualified companies or third party has retained any Kansas payroll
628	628	withholding taxes or any other financial, employee or other records that
629	629	pertain to eligibility for benefits or compliance with the requirements of
630	630	this act shall be made available by the qualified company or qualified
631	631	companies for inspection by the secretary or the secretary's duly
632	632	authorized agents or employees.
633	633	(2) (A) Any inspection conducted pursuant to paragraph (1) shall be
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677	677	started and completed within business hours.
678	678	(B) The secretary shall provide written notice to the qualified
679	679	company or qualified companies or third party of any such upcoming
680	680	inspection 10 calendar days before such inspection is conducted.
681	681	(3) Upon request by the secretary, the department of revenue shall
682	682	audit the qualified company or qualified companies, or a third party if
683	683	applicable, for compliance with the provisions of this act. The qualified
684	684	company or qualified companies shall cooperate with such audit.
685	685	(i) The secretary of revenue, in consultation with the secretary of
686	686	commerce, shall develop a form that shall be completed annually by any
687	687	qualified company that received any tax benefit pursuant to this section
688	688	and section 3 or 4, and amendments thereto. Such form shall require, at a
689	689	minimum, the information required by K.S.A. 79-32,243(a)(1) through (a)
690	690	(6), and amendments thereto, and any other information reasonably
691	691	required by the secretary of revenue or the secretary of commerce to
692	692	ensure compliance with the provisions of this act, applicable rules and
693	693	regulations, any agreement with the secretary of commerce pursuant to this
694	694	act and eligibility for any tax-related benefits under this act. The contents
695	695	of the completed form shall be confidential except as provided in K.S.A.
696	696	79-32,234, and amendments thereto.
697	697	(j) The secretary of commerce or the secretary of revenue may adopt
698	698	rules and regulations for the implementation of this act.
699	699	New Sec. 3. (a) (1) For taxable years commencing on and after
700	700	January 1, 2024, a qualified company that makes a qualified business
701	701	investment in a qualified business facility and meets the requirements of
702	702	section 2, and amendments thereto, and this section shall be allowed a
703	703	credit for such investment as provided by this section against the tax
704	704	imposed by the Kansas income tax act, the premium tax or privilege fees
705	705	imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
706	706	privilege tax as measured by the net income of financial institutions
707	707	imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
708	708	Annotated, and amendments thereto.
709	709	(2) The credit shall be earned by the taxpayer each taxable year based
710	710	on the amount of the qualified investment made in that taxable year as
711	711	further provided in this section. The entire amount of the credit that is
712	712	earned each taxable year shall not be claimed by the taxpayer in the
713	713	taxable year that such credit is earned but shall be divided into equal
714	714	portions or installments, as determined by the secretary. A portion or
715	715	installment shall be claimed by the qualified company commencing with
716	716	the taxable year after the credit is earned and an equivalent amount of such
717	717	portion or installment shall be claimed in each of the next successive
718	718	taxable years for not less than a total of five taxable years, as determined
719	719	by the secretary.
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763	763	(3) The amount of the tax credit earned in a taxable year pursuant to
764	764	this subsection shall be up to 10%, at the discretion of the secretary, of the
765	765	entire amount of the qualified investment that is invested during such
766	766	taxable year, except for qualified investments for eligible projects located
767	767	outside of a metropolitan county. For eligible projects located outside of a
768	768	metropolitan county, the amount of the tax credit earned in a taxable year
769	769	shall be 10%. Such percentage shall be set forth in the agreement pursuant
770	770	to section 2, and amendments thereto. The total qualified investment shall
771	771	be completed within five years commencing from the date specified in the
772	772	agreement. The total amount of the qualified investment shall be at least
773	773	$250,000,000 for a qualified company that submits an application to
774	774	construct a qualified business facility for an electric or hydrogen motor
775	775	vehicle assembly operation project.
776	776	(b) The secretary of commerce shall set forth in the agreement
777	777	entered into pursuant to section 2, and amendments thereto, a percentage
778	778	of the earned tax credit that may be refundable when claimed. Such
779	779	percentage of a tax credit installment may be refundable to such taxpayer
780	780	if the amount of the tax credit claimed for that taxable year exceeds the
781	781	taxpayer's tax liability for such year. No earned tax credit shall be
782	782	refundable after the taxable year that such credit may be claimed.
783	783	(c) The qualified company or qualified companies shall meet the
784	784	requirements of this act, any rules and regulations of the secretary of
785	785	commerce under this act and the terms of the agreement to receive a credit
786	786	each year that a credit is earned or an installment portion of the earned
787	787	credit is claimed. No credit shall be issued by the secretary of revenue
788	788	unless the qualified company or qualified companies has been certified by
789	789	the secretary of commerce as eligible as provided by section 2, and
790	790	amendments thereto, for each taxable year that the credit is claimed. The
791	791	secretary of commerce shall provide such certifications to the secretary of
792	792	revenue.
793	793	(d) (1) If the qualified company or qualified companies breach the
794	794	terms and conditions of the agreement entered into pursuant to section 2,
795	795	and amendments thereto, except as provided in paragraph (2), fail to reach
796	796	at least 90% of the qualified investment required under section 2, and
797	797	amendments thereto, the qualified company or qualified companies shall
798	798	be liable for repayment of the amount of the tax credits to the state and all
799	799	other benefits received under this act as provided by section 2, and
800	800	amendments thereto.
801	801	(2) Any qualified company that submits an application to construct a
802	802	qualified business facility for an electric or hydrogen motor vehicle
803	803	assembly operation project shall repay to the state all tax credits received
804	804	if the total qualified investment required by subsection (a)(3) is not
805	805	completed by the project completion date as specified in the agreement
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849	849	pursuant to section 2, and amendments thereto.
850	850	(e) As a condition for claiming credits pursuant to this section, any
851	851	qualified company or qualified companies shall provide information
852	852	pursuant to K.S.A. 79-32,243, and amendments thereto, as part of the tax
853	853	return in which such credits are claimed. Such credits shall not be denied
854	854	solely on the basis of the contents of the information provided by a
855	855	qualified company pursuant to K.S.A. 79-32,243, and amendments thereto.
856	856	New Sec. 4. (a) For taxable years commencing on and after January
857	857	1, 2024, a qualified company that meets the requirements of section 2, and
858	858	amendments thereto, and this section may be eligible to retain up to 100%,
859	859	as determined by the secretary, of the qualified company's Kansas payroll
860	860	withholding taxes under the Kansas withholding and declaration of
861	861	estimated tax act for the qualified company's employees. The percentage
862	862	of withholding taxes to be retained each year shall be set forth in the
863	863	agreement pursuant to section 2, and amendments thereto. As a condition
864	864	of receiving and retaining this benefit, the qualified company shall agree to
865	865	maintain a median wage or average wage, as specified by the secretary,
866	866	paid to new employees, as are required by section 2, and amendments
867	867	thereto, that is equal to or greater than 120% of the county median wage of
868	868	the county where such employees are employed by the qualified company.
869	869	Such median or average wage paid to new employees shall be maintained
870	870	in each taxable year that the qualified company claims this benefit and
871	871	throughout the term of the agreement with the secretary. The secretary may
872	872	also require, as a condition of receiving this benefit, that the qualified
873	873	company meet specified performance or other targets. Any such
874	874	requirements shall be set forth in the agreement with the secretary. This
875	875	benefit shall be available for a period of up to 10 successive taxable years,
876	876	as determined by the secretary. A qualified company or qualified
877	877	companies shall be eligible to earn benefits of this section commencing on
878	878	the date that the qualified company or qualified companies enter into an
879	879	agreement with the secretary as provided in section 2, and amendments
880	880	thereto, or a date as determined by the secretary, but not later than three
881	881	calendar years after the year the qualified company enters into the
882	882	agreement with the secretary.
883	883	(b) The agreement between the secretary of commerce and a qualified
884	884	company pursuant to section 2, and amendments thereto, shall specify that,
885	885	if a qualified company breaches the terms and conditions set forth in the
886	886	agreement and is unable to hire and or retain a minimum of 90% of the
887	887	number of new employees as specified in the agreement and as required
888	888	pursuant to section 2, and amendments thereto, a qualified company shall
889	889	be required to remit to the state an amount that shall be determined by
890	890	comparing the shortfall in job creation and retention, expressed as a
891	891	percentage, to the amount of the aggregate Kansas payroll withholding
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935	935	taxes retained by the qualified company or remitted to the qualified
936	936	company by a third party.
937	937	(c) For each year that the agreement is in effect, the secretary of
938	938	commerce shall certify to the secretary of revenue:
939	939	(1) That a qualified company is eligible to receive benefits under this
940	940	act and the terms of the agreement;
941	941	(2) the number of employees;
942	942	(3) the amount of gross wages being paid to each such employee; and
943	943	(4) the percentage of payroll withholding taxes to be retained by the
944	944	qualified company.
945	945	(d) Any qualified company that receives benefits pursuant to this
946	946	section, shall complete and submit to the department of revenue the
947	947	amount of Kansas payroll withholding tax being retained by a qualified
948	948	company in the form and manner prescribed by the director of taxation.
949	949	(f) The secretary of revenue and the secretary of commerce shall
950	950	cooperate to develop and coordinate procedures to implement the
951	951	provisions of this act.
952	952	New Sec. 5. (a) On and after July 1, 2024, a qualified company that
953	953	meets the requirements of section 2, and amendments thereto, and this
954	954	section and that has entered into an agreement with the secretary, as
955	955	provided by section 2, and amendments thereto, may be eligible for
956	956	reimbursement for up to one year of training and education eligible
957	957	expenses for training or education completed by each new employee, as
958	958	determined by the secretary and as provided by this section. The maximum
959	959	amount of reimbursement paid to a qualified company shall be $5,000,000
960	960	per qualifying project.
961	961	(b) A qualified company shall be eligible commencing on the date the
962	962	qualified company enters into an agreement with the secretary as provided
963	963	in section 2, and amendments thereto, or on a date determined by the
964	964	secretary and set forth in the agreement. Only training and education
965	965	expenses for new employees that can establish residency in Kansas at the
966	966	completion of the training or education program and are employed at a
967	967	qualified business facility of a qualified company that is located and
968	968	operating in Kansas shall be eligible for reimbursement.
969	969	(c) As a condition of receiving and retaining this benefit, the qualified
970	970	company shall agree to annually provide evidence of eligibility as required
971	971	by this section and the terms of the agreement under section 2, and
972	972	amendments thereto, to the secretary. Such evidence shall include the
973	973	number of new hires, amount of eligible training and education expense,
974	974	state residency of the employee trainee at the completion of the training
975	975	and any other evidence reasonably required by the secretary for each year
976	976	that the incentive is claimed.
977	977	(d) Subject to appropriations therefor, reimbursement in the amount
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1021	1021	approved by the secretary and pursuant to the terms of the agreement and
1022	1022	the limitations of subsection (a) shall be made by the secretary or the
1023	1023	secretary's designee from the transformation of passenger and freight
1024	1024	vehicle industry act new employee training and education fund established
1025	1025	in section 6, and amendments thereto.
1026	1026	(e) No reimbursement shall be issued unless the qualified company
1027	1027	has demonstrated to the satisfaction of the secretary that the employee
1028	1028	trainee has established Kansas residency by the completion date of their
1029	1029	training and has been certified by the secretary, as provided in section 2,
1030	1030	and amendments thereto, as meeting all requirements of this act, any rules
1031	1031	and regulations of the secretary and the agreement executed pursuant to
1032	1032	section 2, and amendments thereto.
1033	1033	(f) If a qualified company breaches the terms and conditions of the
1034	1034	agreement pursuant to section 2, and amendments thereto, or the
1035	1035	requirements of this section, reimbursements shall be repaid to the state as
1036	1036	provided by section 2, and amendments thereto.
1037	1037	New Sec. 6. There is hereby established in the state treasury the
1038	1038	transformation of passenger and freight vehicle industry act new employee
1039	1039	training and education fund to be administered by the secretary of
1040	1040	commerce. All moneys credited to the transformation of passenger and
1041	1041	freight vehicle industry act new employee training and education fund
1042	1042	shall be used by the Kansas department of commerce for reimbursement to
1043	1043	qualified companies for training and education eligible expenses pursuant
1044	1044	to the provisions of sections 2 and 5, and amendments thereto. All
1045	1045	expenditures from the transformation of passenger and freight vehicle
1046	1046	industry act new employee training and education fund shall be made in
1047	1047	accordance with appropriation acts upon warrants of the director of
1048	1048	accounts and reports issued pursuant to vouchers approved by the
1049	1049	secretary of commerce or the secretary's designee.
1050	1050	New Sec. 7. (a) On and after July 1, 2024, a qualified company that
1051	1051	meets the requirements of section 2, and amendments thereto, and this
1052	1052	section may be eligible for a sales tax exemption under the provisions of
1053	1053	K.S.A. 79-3606(oooo), and amendments thereto, if approved by the
1054	1054	secretary.
1055	1055	(b) Qualified companies that satisfy such requirements may receive
1056	1056	the sales tax exemption commencing on the date that the qualified
1057	1057	company begins construction of the qualified business facility, as
1058	1058	determined by the secretary of commerce, or an earlier date if agreed by
1059	1059	the secretary and incorporated into the agreement pursuant to section 2,
1060	1060	and amendments thereto.
1061	1061	(c) The secretary of commerce shall provide notice to the secretary of
1062	1062	revenue regarding an approval of a sales tax exemption. The sales tax
1063	1063	exemption shall be valid until construction of the qualified business
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1107	1107	facility has been completed as certified by the secretary of commerce to
1108	1108	the secretary of revenue or the date specified for completion of the
1109	1109	qualified business facility in the agreement executed pursuant to section 2,
1110	1110	and amendments thereto, whichever occurs first. No sales tax exemption
1111	1111	shall be issued by the secretary of revenue unless the qualified company or
1112	1112	qualified companies has been certified by the secretary of commerce, as
1113	1113	provided in section 2, and amendments thereto, as meeting all
1114	1114	requirements of this act, applicable rules and regulations and the
1115	1115	agreement executed pursuant to section 2, and amendments thereto.
1116	1116	(d) A sales tax exemption shall be revoked by the secretary of
1117	1117	revenue upon notification by the secretary of commerce that the qualified
1118	1118	company has been disapproved by the secretary of commerce.
1119	1119	(e) If a qualified company breaches the terms and conditions of the
1120	1120	agreement pursuant to section 2, and amendments thereto, and is unable to
1121	1121	hire and or retain a minimum of 90% of the number of new employees as
1122	1122	specified in the agreement or as required pursuant to section 2, and
1123	1123	amendments thereto, a qualified company shall be required to remit to the
1124	1124	state an amount that shall be determined by comparing the shortfall in job
1125	1125	creation and retention, expressed as a percentage, to the amount of the
1126	1126	sales tax exemption as provided by section 2, and amendments thereto.
1127	1127	New Sec. 8. (a) On or before January 31 of each year, the secretary of
1128	1128	commerce shall transmit to the governor, the senate committees on
1129	1129	assessment and taxation and commerce and the house of representatives
1130	1130	committees on taxation and commerce, labor and economic development,
1131	1131	or any successor committee, a report based on information received from
1132	1132	each qualified company receiving benefits under this act, describing, at a
1133	1133	minimum:
1134	1134	(1) The names of the qualified companies;
1135	1135	(2) the types of qualified companies utilizing the act;
1136	1136	(3) the location of such companies and the location, description and
1137	1137	economic and industry impact of such companies' business operations in
1138	1138	Kansas;
1139	1139	(4) the cumulative number of new employees hired and the new
1140	1140	employees hired in that calendar year, with respect to each qualified
1141	1141	company;
1142	1142	(5) the number of employees who reside in Kansas and the number of
1143	1143	employees who reside in other states, designated with respect to each other
1144	1144	state and, if available, the number of employees who have relocated to
1145	1145	Kansas from another state;
1146	1146	(6) the wages paid for such new employees;
1147	1147	(7) the annual and cumulative amount of investments made;
1148	1148	(8) the annual amount of each benefit provided under this act;
1149	1149	(9) the estimated net state fiscal impact, including the direct and
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1192	1192	43 HB 2744 15
1193	1193	indirect new state taxes derived from the new employees hired;
1194	1194	(10) an estimate of the multiplier effect on the Kansas economy of the
1195	1195	benefits received under this act; and
1196	1196	(11) any material defaults by a qualified company of the terms of any
1197	1197	agreement pursuant to section 2, and amendments thereto.
1198	1198	Sec. 9. K.S.A. 2023 Supp. 79-3606 is hereby amended to read as
1199	1199	follows: 79-3606. The following shall be exempt from the tax imposed by
1200	1200	this act:
1201	1201	(a) All sales of motor-vehicle fuel or other articles upon which a sales
1202	1202	or excise tax has been paid, not subject to refund, under the laws of this
1203	1203	state except cigarettes and electronic cigarettes as defined by K.S.A. 79-
1204	1204	3301, and amendments thereto, including consumable material for such
1205	1205	electronic cigarettes, cereal malt beverages and malt products as defined
1206	1206	by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt,
1207	1207	malt syrup and malt extract, that is not subject to taxation under the
1208	1208	provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles
1209	1209	taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed
1210	1210	pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and
1211	1211	laundry services taxed pursuant to K.S.A. 65-34,150, and amendments
1212	1212	thereto, and gross receipts from regulated sports contests taxed pursuant to
1213	1213	the Kansas professional regulated sports act, and amendments thereto;
1214	1214	(b) all sales of tangible personal property or service, including the
1215	1215	renting and leasing of tangible personal property, purchased directly by the
1216	1216	state of Kansas, a political subdivision thereof, other than a school or
1217	1217	educational institution, or purchased by a public or private nonprofit
1218	1218	hospital, public hospital authority, nonprofit blood, tissue or organ bank or
1219	1219	nonprofit integrated community care organization and used exclusively for
1220	1220	state, political subdivision, hospital, public hospital authority, nonprofit
1221	1221	blood, tissue or organ bank or nonprofit integrated community care
1222	1222	organization purposes, except when: (1) Such state, hospital or public
1223	1223	hospital authority is engaged or proposes to engage in any business
1224	1224	specifically taxable under the provisions of this act and such items of
1225	1225	tangible personal property or service are used or proposed to be used in
1226	1226	such business; or (2) such political subdivision is engaged or proposes to
1227	1227	engage in the business of furnishing gas, electricity or heat to others and
1228	1228	such items of personal property or service are used or proposed to be used
1229	1229	in such business;
1230	1230	(c) all sales of tangible personal property or services, including the
1231	1231	renting and leasing of tangible personal property, purchased directly by a
1232	1232	public or private elementary or secondary school or public or private
1233	1233	nonprofit educational institution and used primarily by such school or
1234	1234	institution for nonsectarian programs and activities provided or sponsored
1235	1235	by such school or institution or in the erection, repair or enlargement of
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1279	1279	buildings to be used for such purposes. The exemption herein provided
1280	1280	shall not apply to erection, construction, repair, enlargement or equipment
1281	1281	of buildings used primarily for human habitation, except that such
1282	1282	exemption shall apply to the erection, construction, repair, enlargement or
1283	1283	equipment of buildings used for human habitation by the cerebral palsy
1284	1284	research foundation of Kansas located in Wichita, Kansas, and multi
1285	1285	community diversified services, incorporated, located in McPherson,
1286	1286	Kansas;
1287	1287	(d) all sales of tangible personal property or services purchased by a
1288	1288	contractor for the purpose of constructing, equipping, reconstructing,
1289	1289	maintaining, repairing, enlarging, furnishing or remodeling facilities for
1290	1290	any public or private nonprofit hospital or public hospital authority, public
1291	1291	or private elementary or secondary school, a public or private nonprofit
1292	1292	educational institution, state correctional institution including a privately
1293	1293	constructed correctional institution contracted for state use and ownership,
1294	1294	that would be exempt from taxation under the provisions of this act if
1295	1295	purchased directly by such hospital or public hospital authority, school,
1296	1296	educational institution or a state correctional institution; and all sales of
1297	1297	tangible personal property or services purchased by a contractor for the
1298	1298	purpose of constructing, equipping, reconstructing, maintaining, repairing,
1299	1299	enlarging, furnishing or remodeling facilities for any political subdivision
1300	1300	of the state or district described in subsection (s), the total cost of which is
1301	1301	paid from funds of such political subdivision or district and that would be
1302	1302	exempt from taxation under the provisions of this act if purchased directly
1303	1303	by such political subdivision or district. Nothing in this subsection or in
1304	1304	the provisions of K.S.A. 12-3418, and amendments thereto, shall be
1305	1305	deemed to exempt the purchase of any construction machinery, equipment
1306	1306	or tools used in the constructing, equipping, reconstructing, maintaining,
1307	1307	repairing, enlarging, furnishing or remodeling facilities for any political
1308	1308	subdivision of the state or any such district. As used in this subsection,
1309	1309	K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a
1310	1310	political subdivision" shall mean general tax revenues, the proceeds of any
1311	1311	bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
1312	1312	purpose of constructing, equipping, reconstructing, repairing, enlarging,
1313	1313	furnishing or remodeling facilities that are to be leased to the donor. When
1314	1314	any political subdivision of the state, district described in subsection (s),
1315	1315	public or private nonprofit hospital or public hospital authority, public or
1316	1316	private elementary or secondary school, public or private nonprofit
1317	1317	educational institution, state correctional institution including a privately
1318	1318	constructed correctional institution contracted for state use and ownership
1319	1319	shall contract for the purpose of constructing, equipping, reconstructing,
1320	1320	maintaining, repairing, enlarging, furnishing or remodeling facilities, it
1321	1321	shall obtain from the state and furnish to the contractor an exemption
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1364	1364	43 HB 2744 17
1365	1365	certificate for the project involved, and the contractor may purchase
1366	1366	materials for incorporation in such project. The contractor shall furnish the
1367	1367	number of such certificate to all suppliers from whom such purchases are
1368	1368	made, and such suppliers shall execute invoices covering the same bearing
1369	1369	the number of such certificate. Upon completion of the project the
1370	1370	contractor shall furnish to the political subdivision, district described in
1371	1371	subsection (s), hospital or public hospital authority, school, educational
1372	1372	institution or department of corrections concerned a sworn statement, on a
1373	1373	form to be provided by the director of taxation, that all purchases so made
1374	1374	were entitled to exemption under this subsection. As an alternative to the
1375	1375	foregoing procedure, any such contracting entity may apply to the
1376	1376	secretary of revenue for agent status for the sole purpose of issuing and
1377	1377	furnishing project exemption certificates to contractors pursuant to rules
1378	1378	and regulations adopted by the secretary establishing conditions and
1379	1379	standards for the granting and maintaining of such status. All invoices
1380	1380	shall be held by the contractor for a period of five years and shall be
1381	1381	subject to audit by the director of taxation. If any materials purchased
1382	1382	under such a certificate are found not to have been incorporated in the
1383	1383	building or other project or not to have been returned for credit or the sales
1384	1384	or compensating tax otherwise imposed upon such materials that will not
1385	1385	be so incorporated in the building or other project reported and paid by
1386	1386	such contractor to the director of taxation not later than the 20
1387	1387	th
1388	1388	day of the
1389	1389	month following the close of the month in which it shall be determined
1390	1390	that such materials will not be used for the purpose for which such
1391	1391	certificate was issued, the political subdivision, district described in
1392	1392	subsection (s), hospital or public hospital authority, school, educational
1393	1393	institution or the contractor contracting with the department of corrections
1394	1394	for a correctional institution concerned shall be liable for tax on all
1395	1395	materials purchased for the project, and upon payment thereof it may
1396	1396	recover the same from the contractor together with reasonable attorney
1397	1397	fees. Any contractor or any agent, employee or subcontractor thereof, who
1398	1398	shall use or otherwise dispose of any materials purchased under such a
1399	1399	certificate for any purpose other than that for which such a certificate is
1400	1400	issued without the payment of the sales or compensating tax otherwise
1401	1401	imposed upon such materials, shall be guilty of a misdemeanor and, upon
1402	1402	conviction therefor, shall be subject to the penalties provided for in K.S.A.
1403	1403	79-3615(h), and amendments thereto;
1404	1404	(e) all sales of tangible personal property or services purchased by a
1405	1405	contractor for the erection, repair or enlargement of buildings or other
1406	1406	projects for the government of the United States, its agencies or
1407	1407	instrumentalities, that would be exempt from taxation if purchased directly
1408	1408	by the government of the United States, its agencies or instrumentalities.
1409	1409	When the government of the United States, its agencies or
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1452	1452	43 HB 2744 18
1453	1453	instrumentalities shall contract for the erection, repair, or enlargement of
1454	1454	any building or other project, it shall obtain from the state and furnish to
1455	1455	the contractor an exemption certificate for the project involved, and the
1456	1456	contractor may purchase materials for incorporation in such project. The
1457	1457	contractor shall furnish the number of such certificates to all suppliers
1458	1458	from whom such purchases are made, and such suppliers shall execute
1459	1459	invoices covering the same bearing the number of such certificate. Upon
1460	1460	completion of the project the contractor shall furnish to the government of
1461	1461	the United States, its agencies or instrumentalities concerned a sworn
1462	1462	statement, on a form to be provided by the director of taxation, that all
1463	1463	purchases so made were entitled to exemption under this subsection. As an
1464	1464	alternative to the foregoing procedure, any such contracting entity may
1465	1465	apply to the secretary of revenue for agent status for the sole purpose of
1466	1466	issuing and furnishing project exemption certificates to contractors
1467	1467	pursuant to rules and regulations adopted by the secretary establishing
1468	1468	conditions and standards for the granting and maintaining of such status.
1469	1469	All invoices shall be held by the contractor for a period of five years and
1470	1470	shall be subject to audit by the director of taxation. Any contractor or any
1471	1471	agent, employee or subcontractor thereof, who shall use or otherwise
1472	1472	dispose of any materials purchased under such a certificate for any purpose
1473	1473	other than that for which such a certificate is issued without the payment
1474	1474	of the sales or compensating tax otherwise imposed upon such materials,
1475	1475	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
1476	1476	subject to the penalties provided for in K.S.A. 79-3615(h), and
1477	1477	amendments thereto;
1478	1478	(f) tangible personal property purchased by a railroad or public utility
1479	1479	for consumption or movement directly and immediately in interstate
1480	1480	commerce;
1481	1481	(g) sales of aircraft including remanufactured and modified aircraft
1482	1482	sold to persons using directly or through an authorized agent such aircraft
1483	1483	as certified or licensed carriers of persons or property in interstate or
1484	1484	foreign commerce under authority of the laws of the United States or any
1485	1485	foreign government or sold to any foreign government or agency or
1486	1486	instrumentality of such foreign government and all sales of aircraft for use
1487	1487	outside of the United States and sales of aircraft repair, modification and
1488	1488	replacement parts and sales of services employed in the remanufacture,
1489	1489	modification and repair of aircraft;
1490	1490	(h) all rentals of nonsectarian textbooks by public or private
1491	1491	elementary or secondary schools;
1492	1492	(i) the lease or rental of all films, records, tapes, or any type of sound
1493	1493	or picture transcriptions used by motion picture exhibitors;
1494	1494	(j) meals served without charge or food used in the preparation of
1495	1495	such meals to employees of any restaurant, eating house, dining car, hotel,
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1538	1538	43 HB 2744 19
1539	1539	drugstore or other place where meals or drinks are regularly sold to the
1540	1540	public if such employees' duties are related to the furnishing or sale of
1541	1541	such meals or drinks;
1542	1542	(k) any motor vehicle, semitrailer or pole trailer, as such terms are
1543	1543	defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and
1544	1544	delivered in this state to a bona fide resident of another state, which motor
1545	1545	vehicle, semitrailer, pole trailer or aircraft is not to be registered or based
1546	1546	in this state and which vehicle, semitrailer, pole trailer or aircraft will not
1547	1547	remain in this state more than 10 days;
1548	1548	(l) all isolated or occasional sales of tangible personal property,
1549	1549	services, substances or things, except isolated or occasional sale of motor
1550	1550	vehicles specifically taxed under the provisions of K.S.A. 79-3603(o), and
1551	1551	amendments thereto;
1552	1552	(m) all sales of tangible personal property that become an ingredient
1553	1553	or component part of tangible personal property or services produced,
1554	1554	manufactured or compounded for ultimate sale at retail within or without
1555	1555	the state of Kansas; and any such producer, manufacturer or compounder
1556	1556	may obtain from the director of taxation and furnish to the supplier an
1557	1557	exemption certificate number for tangible personal property for use as an
1558	1558	ingredient or component part of the property or services produced,
1559	1559	manufactured or compounded;
1560	1560	(n) all sales of tangible personal property that is consumed in the
1561	1561	production, manufacture, processing, mining, drilling, refining or
1562	1562	compounding of tangible personal property, the treating of by-products or
1563	1563	wastes derived from any such production process, the providing of
1564	1564	services or the irrigation of crops for ultimate sale at retail within or
1565	1565	without the state of Kansas; and any purchaser of such property may
1566	1566	obtain from the director of taxation and furnish to the supplier an
1567	1567	exemption certificate number for tangible personal property for
1568	1568	consumption in such production, manufacture, processing, mining,
1569	1569	drilling, refining, compounding, treating, irrigation and in providing such
1570	1570	services;
1571	1571	(o) all sales of animals, fowl and aquatic plants and animals, the
1572	1572	primary purpose of which is use in agriculture or aquaculture, as defined in
1573	1573	K.S.A. 47-1901, and amendments thereto, the production of food for
1574	1574	human consumption, the production of animal, dairy, poultry or aquatic
1575	1575	plant and animal products, fiber or fur, or the production of offspring for
1576	1576	use for any such purpose or purposes;
1577	1577	(p) all sales of drugs dispensed pursuant to a prescription order by a
1578	1578	licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-
1579	1579	1626, and amendments thereto. As used in this subsection, "drug" means a
1580	1580	compound, substance or preparation and any component of a compound,
1581	1581	substance or preparation, other than food and food ingredients, dietary
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1624	1624	43 HB 2744 20
1625	1625	supplements or alcoholic beverages, recognized in the official United
1626	1626	States pharmacopeia, official homeopathic pharmacopoeia of the United
1627	1627	States or official national formulary, and supplement to any of them,
1628	1628	intended for use in the diagnosis, cure, mitigation, treatment or prevention
1629	1629	of disease or intended to affect the structure or any function of the body,
1630	1630	except that for taxable years commencing after December 31, 2013, this
1631	1631	subsection shall not apply to any sales of drugs used in the performance or
1632	1632	induction of an abortion, as defined in K.S.A. 65-6701, and amendments
1633	1633	thereto;
1634	1634	(q) all sales of insulin dispensed by a person licensed by the state
1635	1635	board of pharmacy to a person for treatment of diabetes at the direction of
1636	1636	a person licensed to practice medicine by the state board of healing arts;
1637	1637	(r) all sales of oxygen delivery equipment, kidney dialysis equipment,
1638	1638	enteral feeding systems, prosthetic devices and mobility enhancing
1639	1639	equipment prescribed in writing by a person licensed to practice the
1640	1640	healing arts, dentistry or optometry, and in addition to such sales, all sales
1641	1641	of hearing aids, as defined by K.S.A. 74-5807(c), and amendments thereto,
1642	1642	and repair and replacement parts therefor, including batteries, by a person
1643	1643	licensed in the practice of dispensing and fitting hearing aids pursuant to
1644	1644	the provisions of K.S.A. 74-5808, and amendments thereto. For the
1645	1645	purposes of this subsection: (1) "Mobility enhancing equipment" means
1646	1646	equipment including repair and replacement parts to same, but does not
1647	1647	include durable medical equipment, which is primarily and customarily
1648	1648	used to provide or increase the ability to move from one place to another
1649	1649	and which is appropriate for use either in a home or a motor vehicle; is not
1650	1650	generally used by persons with normal mobility; and does not include any
1651	1651	motor vehicle or equipment on a motor vehicle normally provided by a
1652	1652	motor vehicle manufacturer; and (2) "prosthetic device" means a
1653	1653	replacement, corrective or supportive device including repair and
1654	1654	replacement parts for same worn on or in the body to artificially replace a
1655	1655	missing portion of the body, prevent or correct physical deformity or
1656	1656	malfunction or support a weak or deformed portion of the body;
1657	1657	(s) except as provided in K.S.A. 82a-2101, and amendments thereto,
1658	1658	all sales of tangible personal property or services purchased directly or
1659	1659	indirectly by a groundwater management district organized or operating
1660	1660	under the authority of K.S.A. 82a-1020 et seq., and amendments thereto,
1661	1661	by a rural water district organized or operating under the authority of
1662	1662	K.S.A. 82a-612, and amendments thereto, or by a water supply district
1663	1663	organized or operating under the authority of K.S.A. 19-3501 et seq., 19-
1664	1664	3522 et seq. or 19-3545, and amendments thereto, which property or
1665	1665	services are used in the construction activities, operation or maintenance of
1666	1666	the district;
1667	1667	(t) all sales of farm machinery and equipment or aquaculture
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1710	1710	43 HB 2744 21
1711	1711	machinery and equipment, repair and replacement parts therefor and
1712	1712	services performed in the repair and maintenance of such machinery and
1713	1713	equipment. For the purposes of this subsection the term "farm machinery
1714	1714	and equipment or aquaculture machinery and equipment" shall include a
1715	1715	work-site utility vehicle, as defined in K.S.A. 8-126, and amendments
1716	1716	thereto, and is equipped with a bed or cargo box for hauling materials, and
1717	1717	shall also include machinery and equipment used in the operation of
1718	1718	Christmas tree farming but shall not include any passenger vehicle, truck,
1719	1719	truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as
1720	1720	such terms are defined by K.S.A. 8-126, and amendments thereto. "Farm
1721	1721	machinery and equipment" includes precision farming equipment that is
1722	1722	portable or is installed or purchased to be installed on farm machinery and
1723	1723	equipment. "Precision farming equipment" includes the following items
1724	1724	used only in computer-assisted farming, ranching or aquaculture
1725	1725	production operations: Soil testing sensors, yield monitors, computers,
1726	1726	monitors, software, global positioning and mapping systems, guiding
1727	1727	systems, modems, data communications equipment and any necessary
1728	1728	mounting hardware, wiring and antennas. Each purchaser of farm
1729	1729	machinery and equipment or aquaculture machinery and equipment
1730	1730	exempted herein must certify in writing on the copy of the invoice or sales
1731	1731	ticket to be retained by the seller that the farm machinery and equipment
1732	1732	or aquaculture machinery and equipment purchased will be used only in
1733	1733	farming, ranching or aquaculture production. Farming or ranching shall
1734	1734	include the operation of a feedlot and farm and ranch work for hire and the
1735	1735	operation of a nursery;
1736	1736	(u) all leases or rentals of tangible personal property used as a
1737	1737	dwelling if such tangible personal property is leased or rented for a period
1738	1738	of more than 28 consecutive days;
1739	1739	(v) all sales of tangible personal property to any contractor for use in
1740	1740	preparing meals for delivery to homebound elderly persons over 60 years
1741	1741	of age and to homebound disabled persons or to be served at a group-
1742	1742	sitting at a location outside of the home to otherwise homebound elderly
1743	1743	persons over 60 years of age and to otherwise homebound disabled
1744	1744	persons, as all or part of any food service project funded in whole or in
1745	1745	part by government or as part of a private nonprofit food service project
1746	1746	available to all such elderly or disabled persons residing within an area of
1747	1747	service designated by the private nonprofit organization, and all sales of
1748	1748	tangible personal property for use in preparing meals for consumption by
1749	1749	indigent or homeless individuals whether or not such meals are consumed
1750	1750	at a place designated for such purpose, and all sales of food products by or
1751	1751	on behalf of any such contractor or organization for any such purpose;
1752	1752	(w) all sales of natural gas, electricity, heat and water delivered
1753	1753	through mains, lines or pipes: (1) To residential premises for
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1796	1796	43 HB 2744 22
1797	1797	noncommercial use by the occupant of such premises; (2) for agricultural
1798	1798	use and also, for such use, all sales of propane gas; (3) for use in the
1799	1799	severing of oil; and (4) to any property which is exempt from property
1800	1800	taxation pursuant to K.S.A. 79-201b, Second through Sixth. As used in this
1801	1801	paragraph, "severing" means the same as defined in K.S.A. 79-4216(k),
1802	1802	and amendments thereto. For all sales of natural gas, electricity and heat
1803	1803	delivered through mains, lines or pipes pursuant to the provisions of
1804	1804	subsection (w)(1) and (w)(2), the provisions of this subsection shall expire
1805	1805	on December 31, 2005;
1806	1806	(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources
1807	1807	for the production of heat or lighting for noncommercial use of an
1808	1808	occupant of residential premises occurring prior to January 1, 2006;
1809	1809	(y) all sales of materials and services used in the repairing, servicing,
1810	1810	altering, maintaining, manufacturing, remanufacturing, or modification of
1811	1811	railroad rolling stock for use in interstate or foreign commerce under
1812	1812	authority of the laws of the United States;
1813	1813	(z) all sales of tangible personal property and services purchased
1814	1814	directly by a port authority or by a contractor therefor as provided by the
1815	1815	provisions of K.S.A. 12-3418, and amendments thereto;
1816	1816	(aa) all sales of materials and services applied to equipment that is
1817	1817	transported into the state from without the state for repair, service,
1818	1818	alteration, maintenance, remanufacture or modification and that is
1819	1819	subsequently transported outside the state for use in the transmission of
1820	1820	liquids or natural gas by means of pipeline in interstate or foreign
1821	1821	commerce under authority of the laws of the United States;
1822	1822	(bb) all sales of used mobile homes or manufactured homes. As used
1823	1823	in this subsection: (1) "Mobile homes" and "manufactured homes" mean
1824	1824	the same as defined in K.S.A. 58-4202, and amendments thereto; and (2)
1825	1825	"sales of used mobile homes or manufactured homes" means sales other
1826	1826	than the original retail sale thereof;
1827	1827	(cc) all sales of tangible personal property or services purchased prior
1828	1828	to January 1, 2012, except as otherwise provided, for the purpose of and in
1829	1829	conjunction with constructing, reconstructing, enlarging or remodeling a
1830	1830	business or retail business that meets the requirements established in
1831	1831	K.S.A. 74-50,115, and amendments thereto, and the sale and installation of
1832	1832	machinery and equipment purchased for installation at any such business
1833	1833	or retail business, and all sales of tangible personal property or services
1834	1834	purchased on or after January 1, 2012, for the purpose of and in
1835	1835	conjunction with constructing, reconstructing, enlarging or remodeling a
1836	1836	business that meets the requirements established in K.S.A. 74-50,115(e),
1837	1837	and amendments thereto, and the sale and installation of machinery and
1838	1838	equipment purchased for installation at any such business. When a person
1839	1839	shall contract for the construction, reconstruction, enlargement or
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1883	1883	remodeling of any such business or retail business, such person shall
1884	1884	obtain from the state and furnish to the contractor an exemption certificate
1885	1885	for the project involved, and the contractor may purchase materials,
1886	1886	machinery and equipment for incorporation in such project. The contractor
1887	1887	shall furnish the number of such certificates to all suppliers from whom
1888	1888	such purchases are made, and such suppliers shall execute invoices
1889	1889	covering the same bearing the number of such certificate. Upon
1890	1890	completion of the project the contractor shall furnish to the owner of the
1891	1891	business or retail business a sworn statement, on a form to be provided by
1892	1892	the director of taxation, that all purchases so made were entitled to
1893	1893	exemption under this subsection. All invoices shall be held by the
1894	1894	contractor for a period of five years and shall be subject to audit by the
1895	1895	director of taxation. Any contractor or any agent, employee or
1896	1896	subcontractor thereof, who shall use or otherwise dispose of any materials,
1897	1897	machinery or equipment purchased under such a certificate for any
1898	1898	purpose other than that for which such a certificate is issued without the
1899	1899	payment of the sales or compensating tax otherwise imposed thereon, shall
1900	1900	be guilty of a misdemeanor and, upon conviction therefor, shall be subject
1901	1901	to the penalties provided for in K.S.A. 79-3615(h), and amendments
1902	1902	thereto. As used in this subsection, "business" and "retail business" mean
1903	1903	the same as defined in K.S.A. 74-50,114, and amendments thereto. Project
1904	1904	exemption certificates that have been previously issued under this
1905	1905	subsection by the department of revenue pursuant to K.S.A. 74-50,115,
1906	1906	and amendments thereto, but not including K.S.A. 74-50,115(e), and
1907	1907	amendments thereto, prior to January 1, 2012, and have not expired will be
1908	1908	effective for the term of the project or two years from the effective date of
1909	1909	the certificate, whichever occurs earlier. Project exemption certificates that
1910	1910	are submitted to the department of revenue prior to January 1, 2012, and
1911	1911	are found to qualify will be issued a project exemption certificate that will
1912	1912	be effective for a two-year period or for the term of the project, whichever
1913	1913	occurs earlier;
1914	1914	(dd) all sales of tangible personal property purchased with food
1915	1915	stamps issued by the United States department of agriculture;
1916	1916	(ee) all sales of lottery tickets and shares made as part of a lottery
1917	1917	operated by the state of Kansas;
1918	1918	(ff) on and after July 1, 1988, all sales of new mobile homes or
1919	1919	manufactured homes to the extent of 40% of the gross receipts, determined
1920	1920	without regard to any trade-in allowance, received from such sale. As used
1921	1921	in this subsection, "mobile homes" and "manufactured homes" mean the
1922	1922	same as defined in K.S.A. 58-4202, and amendments thereto;
1923	1923	(gg) all sales of tangible personal property purchased in accordance
1924	1924	with vouchers issued pursuant to the federal special supplemental food
1925	1925	program for women, infants and children;
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1969	1969	(hh) all sales of medical supplies and equipment, including durable
1970	1970	medical equipment, purchased directly by a nonprofit skilled nursing home
1971	1971	or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
1972	1972	and amendments thereto, for the purpose of providing medical services to
1973	1973	residents thereof. This exemption shall not apply to tangible personal
1974	1974	property customarily used for human habitation purposes. As used in this
1975	1975	subsection, "durable medical equipment" means equipment including
1976	1976	repair and replacement parts for such equipment, that can withstand
1977	1977	repeated use, is primarily and customarily used to serve a medical purpose,
1978	1978	generally is not useful to a person in the absence of illness or injury and is
1979	1979	not worn in or on the body, but does not include mobility enhancing
1980	1980	equipment as defined in subsection (r), oxygen delivery equipment, kidney
1981	1981	dialysis equipment or enteral feeding systems;
1982	1982	(ii) all sales of tangible personal property purchased directly by a
1983	1983	nonprofit organization for nonsectarian comprehensive multidiscipline
1984	1984	youth development programs and activities provided or sponsored by such
1985	1985	organization, and all sales of tangible personal property by or on behalf of
1986	1986	any such organization. This exemption shall not apply to tangible personal
1987	1987	property customarily used for human habitation purposes;
1988	1988	(jj) all sales of tangible personal property or services, including the
1989	1989	renting and leasing of tangible personal property, purchased directly on
1990	1990	behalf of a community-based facility for people with intellectual disability
1991	1991	or mental health center organized pursuant to K.S.A. 19-4001 et seq., and
1992	1992	amendments thereto, and licensed in accordance with the provisions of
1993	1993	K.S.A. 39-2001 et seq., and amendments thereto, and all sales of tangible
1994	1994	personal property or services purchased by contractors during the time
1995	1995	period from July, 2003, through June, 2006, for the purpose of
1996	1996	constructing, equipping, maintaining or furnishing a new facility for a
1997	1997	community-based facility for people with intellectual disability or mental
1998	1998	health center located in Riverton, Cherokee County, Kansas, that would
1999	1999	have been eligible for sales tax exemption pursuant to this subsection if
2000	2000	purchased directly by such facility or center. This exemption shall not
2001	2001	apply to tangible personal property customarily used for human habitation
2002	2002	purposes;
2003	2003	(kk) (1) (A) all sales of machinery and equipment that are used in this
2004	2004	state as an integral or essential part of an integrated production operation
2005	2005	by a manufacturing or processing plant or facility;
2006	2006	(B) all sales of installation, repair and maintenance services
2007	2007	performed on such machinery and equipment; and
2008	2008	(C) all sales of repair and replacement parts and accessories
2009	2009	purchased for such machinery and equipment.
2010	2010	(2) For purposes of this subsection:
2011	2011	(A) "Integrated production operation" means an integrated series of
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2054	2054	43 HB 2744 25
2055	2055	operations engaged in at a manufacturing or processing plant or facility to
2056	2056	process, transform or convert tangible personal property by physical,
2057	2057	chemical or other means into a different form, composition or character
2058	2058	from that in which it originally existed. Integrated production operations
2059	2059	shall include: (i) Production line operations, including packaging
2060	2060	operations; (ii) preproduction operations to handle, store and treat raw
2061	2061	materials; (iii) post production handling, storage, warehousing and
2062	2062	distribution operations; and (iv) waste, pollution and environmental
2063	2063	control operations, if any;
2064	2064	(B) "production line" means the assemblage of machinery and
2065	2065	equipment at a manufacturing or processing plant or facility where the
2066	2066	actual transformation or processing of tangible personal property occurs;
2067	2067	(C) "manufacturing or processing plant or facility" means a single,
2068	2068	fixed location owned or controlled by a manufacturing or processing
2069	2069	business that consists of one or more structures or buildings in a
2070	2070	contiguous area where integrated production operations are conducted to
2071	2071	manufacture or process tangible personal property to be ultimately sold at
2072	2072	retail. Such term shall not include any facility primarily operated for the
2073	2073	purpose of conveying or assisting in the conveyance of natural gas,
2074	2074	electricity, oil or water. A business may operate one or more manufacturing
2075	2075	or processing plants or facilities at different locations to manufacture or
2076	2076	process a single product of tangible personal property to be ultimately sold
2077	2077	at retail;
2078	2078	(D) "manufacturing or processing business" means a business that
2079	2079	utilizes an integrated production operation to manufacture, process,
2080	2080	fabricate, finish or assemble items for wholesale and retail distribution as
2081	2081	part of what is commonly regarded by the general public as an industrial
2082	2082	manufacturing or processing operation or an agricultural commodity
2083	2083	processing operation. (i) Industrial manufacturing or processing operations
2084	2084	include, by way of illustration but not of limitation, the fabrication of
2085	2085	automobiles, airplanes, machinery or transportation equipment, the
2086	2086	fabrication of metal, plastic, wood or paper products, electricity power
2087	2087	generation, water treatment, petroleum refining, chemical production,
2088	2088	wholesale bottling, newspaper printing, ready mixed concrete production,
2089	2089	and the remanufacturing of used parts for wholesale or retail sale. Such
2090	2090	processing operations shall include operations at an oil well, gas well,
2091	2091	mine or other excavation site where the oil, gas, minerals, coal, clay, stone,
2092	2092	sand or gravel that has been extracted from the earth is cleaned, separated,
2093	2093	crushed, ground, milled, screened, washed or otherwise treated or prepared
2094	2094	before its transmission to a refinery or before any other wholesale or retail
2095	2095	distribution. (ii) Agricultural commodity processing operations include, by
2096	2096	way of illustration but not of limitation, meat packing, poultry slaughtering
2097	2097	and dressing, processing and packaging farm and dairy products in sealed
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2141	2141	containers for wholesale and retail distribution, feed grinding, grain
2142	2142	milling, frozen food processing, and grain handling, cleaning, blending,
2143	2143	fumigation, drying and aeration operations engaged in by grain elevators
2144	2144	or other grain storage facilities. (iii) Manufacturing or processing
2145	2145	businesses do not include, by way of illustration but not of limitation,
2146	2146	nonindustrial businesses whose operations are primarily retail and that
2147	2147	produce or process tangible personal property as an incidental part of
2148	2148	conducting the retail business, such as retailers who bake, cook or prepare
2149	2149	food products in the regular course of their retail trade, grocery stores,
2150	2150	meat lockers and meat markets that butcher or dress livestock or poultry in
2151	2151	the regular course of their retail trade, contractors who alter, service, repair
2152	2152	or improve real property, and retail businesses that clean, service or
2153	2153	refurbish and repair tangible personal property for its owner;
2154	2154	(E) "repair and replacement parts and accessories" means all parts
2155	2155	and accessories for exempt machinery and equipment, including, but not
2156	2156	limited to, dies, jigs, molds, patterns and safety devices that are attached to
2157	2157	exempt machinery or that are otherwise used in production, and parts and
2158	2158	accessories that require periodic replacement such as belts, drill bits,
2159	2159	grinding wheels, grinding balls, cutting bars, saws, refractory brick and
2160	2160	other refractory items for exempt kiln equipment used in production
2161	2161	operations;
2162	2162	(F) "primary" or "primarily" mean more than 50% of the time.
2163	2163	(3) For purposes of this subsection, machinery and equipment shall
2164	2164	be deemed to be used as an integral or essential part of an integrated
2165	2165	production operation when used to:
2166	2166	(A) Receive, transport, convey, handle, treat or store raw materials in
2167	2167	preparation of its placement on the production line;
2168	2168	(B) transport, convey, handle or store the property undergoing
2169	2169	manufacturing or processing at any point from the beginning of the
2170	2170	production line through any warehousing or distribution operation of the
2171	2171	final product that occurs at the plant or facility;
2172	2172	(C) act upon, effect, promote or otherwise facilitate a physical change
2173	2173	to the property undergoing manufacturing or processing;
2174	2174	(D) guide, control or direct the movement of property undergoing
2175	2175	manufacturing or processing;
2176	2176	(E) test or measure raw materials, the property undergoing
2177	2177	manufacturing or processing or the finished product, as a necessary part of
2178	2178	the manufacturer's integrated production operations;
2179	2179	(F) plan, manage, control or record the receipt and flow of inventories
2180	2180	of raw materials, consumables and component parts, the flow of the
2181	2181	property undergoing manufacturing or processing and the management of
2182	2182	inventories of the finished product;
2183	2183	(G) produce energy for, lubricate, control the operating of or
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2226	2226	43 HB 2744 27
2227	2227	otherwise enable the functioning of other production machinery and
2228	2228	equipment and the continuation of production operations;
2229	2229	(H) package the property being manufactured or processed in a
2230	2230	container or wrapping in which such property is normally sold or
2231	2231	transported;
2232	2232	(I) transmit or transport electricity, coke, gas, water, steam or similar
2233	2233	substances used in production operations from the point of generation, if
2234	2234	produced by the manufacturer or processor at the plant site, to that
2235	2235	manufacturer's production operation; or, if purchased or delivered from
2236	2236	off-site, from the point where the substance enters the site of the plant or
2237	2237	facility to that manufacturer's production operations;
2238	2238	(J) cool, heat, filter, refine or otherwise treat water, steam, acid, oil,
2239	2239	solvents or other substances that are used in production operations;
2240	2240	(K) provide and control an environment required to maintain certain
2241	2241	levels of air quality, humidity or temperature in special and limited areas
2242	2242	of the plant or facility, where such regulation of temperature or humidity is
2243	2243	part of and essential to the production process;
2244	2244	(L) treat, transport or store waste or other byproducts of production
2245	2245	operations at the plant or facility; or
2246	2246	(M) control pollution at the plant or facility where the pollution is
2247	2247	produced by the manufacturing or processing operation.
2248	2248	(4) The following machinery, equipment and materials shall be
2249	2249	deemed to be exempt even though it may not otherwise qualify as
2250	2250	machinery and equipment used as an integral or essential part of an
2251	2251	integrated production operation: (A) Computers and related peripheral
2252	2252	equipment that are utilized by a manufacturing or processing business for
2253	2253	engineering of the finished product or for research and development or
2254	2254	product design; (B) machinery and equipment that is utilized by a
2255	2255	manufacturing or processing business to manufacture or rebuild tangible
2256	2256	personal property that is used in manufacturing or processing operations,
2257	2257	including tools, dies, molds, forms and other parts of qualifying machinery
2258	2258	and equipment; (C) portable plants for aggregate concrete, bulk cement
2259	2259	and asphalt including cement mixing drums to be attached to a motor
2260	2260	vehicle; (D) industrial fixtures, devices, support facilities and special
2261	2261	foundations necessary for manufacturing and production operations, and
2262	2262	materials and other tangible personal property sold for the purpose of
2263	2263	fabricating such fixtures, devices, facilities and foundations. An exemption
2264	2264	certificate for such purchases shall be signed by the manufacturer or
2265	2265	processor. If the fabricator purchases such material, the fabricator shall
2266	2266	also sign the exemption certificate; (E) a manufacturing or processing
2267	2267	business' laboratory equipment that is not located at the plant or facility,
2268	2268	but that would otherwise qualify for exemption under subsection (3)(E);
2269	2269	(F) all machinery and equipment used in surface mining activities as
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2313	2313	described in K.S.A. 49-601 et seq., and amendments thereto, beginning
2314	2314	from the time a reclamation plan is filed to the acceptance of the
2315	2315	completed final site reclamation.
2316	2316	(5) "Machinery and equipment used as an integral or essential part of
2317	2317	an integrated production operation" shall not include:
2318	2318	(A) Machinery and equipment used for nonproduction purposes,
2319	2319	including, but not limited to, machinery and equipment used for plant
2320	2320	security, fire prevention, first aid, accounting, administration, record
2321	2321	keeping, advertising, marketing, sales or other related activities, plant
2322	2322	cleaning, plant communications and employee work scheduling;
2323	2323	(B) machinery, equipment and tools used primarily in maintaining
2324	2324	and repairing any type of machinery and equipment or the building and
2325	2325	plant;
2326	2326	(C) transportation, transmission and distribution equipment not
2327	2327	primarily used in a production, warehousing or material handling
2328	2328	operation at the plant or facility, including the means of conveyance of
2329	2329	natural gas, electricity, oil or water, and equipment related thereto, located
2330	2330	outside the plant or facility;
2331	2331	(D) office machines and equipment including computers and related
2332	2332	peripheral equipment not used directly and primarily to control or measure
2333	2333	the manufacturing process;
2334	2334	(E) furniture and other furnishings;
2335	2335	(F) buildings, other than exempt machinery and equipment that is
2336	2336	permanently affixed to or becomes a physical part of the building, and any
2337	2337	other part of real estate that is not otherwise exempt;
2338	2338	(G) building fixtures that are not integral to the manufacturing
2339	2339	operation, such as utility systems for heating, ventilation, air conditioning,
2340	2340	communications, plumbing or electrical;
2341	2341	(H) machinery and equipment used for general plant heating, cooling
2342	2342	and lighting;
2343	2343	(I) motor vehicles that are registered for operation on public
2344	2344	highways; or
2345	2345	(J) employee apparel, except safety and protective apparel that is
2346	2346	purchased by an employer and furnished gratuitously to employees who
2347	2347	are involved in production or research activities.
2348	2348	(6) Paragraphs (3) and (5) shall not be construed as exclusive listings
2349	2349	of the machinery and equipment that qualify or do not qualify as an
2350	2350	integral or essential part of an integrated production operation. When
2351	2351	machinery or equipment is used as an integral or essential part of
2352	2352	production operations part of the time and for nonproduction purposes at
2353	2353	other times, the primary use of the machinery or equipment shall
2354	2354	determine whether or not such machinery or equipment qualifies for
2355	2355	exemption.
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2399	2399	(7) The secretary of revenue shall adopt rules and regulations
2400	2400	necessary to administer the provisions of this subsection;
2401	2401	(ll) all sales of educational materials purchased for distribution to the
2402	2402	public at no charge by a nonprofit corporation organized for the purpose of
2403	2403	encouraging, fostering and conducting programs for the improvement of
2404	2404	public health, except that for taxable years commencing after December
2405	2405	31, 2013, this subsection shall not apply to any sales of such materials
2406	2406	purchased by a nonprofit corporation which performs any abortion, as
2407	2407	defined in K.S.A. 65-6701, and amendments thereto;
2408	2408	(mm) all sales of seeds and tree seedlings; fertilizers, insecticides,
2409	2409	herbicides, germicides, pesticides and fungicides; and services, purchased
2410	2410	and used for the purpose of producing plants in order to prevent soil
2411	2411	erosion on land devoted to agricultural use;
2412	2412	(nn) except as otherwise provided in this act, all sales of services
2413	2413	rendered by an advertising agency or licensed broadcast station or any
2414	2414	member, agent or employee thereof;
2415	2415	(oo) all sales of tangible personal property purchased by a community
2416	2416	action group or agency for the exclusive purpose of repairing or
2417	2417	weatherizing housing occupied by low-income individuals;
2418	2418	(pp) all sales of drill bits and explosives actually utilized in the
2419	2419	exploration and production of oil or gas;
2420	2420	(qq) all sales of tangible personal property and services purchased by
2421	2421	a nonprofit museum or historical society or any combination thereof,
2422	2422	including a nonprofit organization that is organized for the purpose of
2423	2423	stimulating public interest in the exploration of space by providing
2424	2424	educational information, exhibits and experiences, that is exempt from
2425	2425	federal income taxation pursuant to section 501(c)(3) of the federal
2426	2426	internal revenue code of 1986;
2427	2427	(rr) all sales of tangible personal property that will admit the
2428	2428	purchaser thereof to any annual event sponsored by a nonprofit
2429	2429	organization that is exempt from federal income taxation pursuant to
2430	2430	section 501(c)(3) of the federal internal revenue code of 1986, except that
2431	2431	for taxable years commencing after December 31, 2013, this subsection
2432	2432	shall not apply to any sales of such tangible personal property purchased
2433	2433	by a nonprofit organization which performs any abortion, as defined in
2434	2434	K.S.A. 65-6701, and amendments thereto;
2435	2435	(ss) all sales of tangible personal property and services purchased by
2436	2436	a public broadcasting station licensed by the federal communications
2437	2437	commission as a noncommercial educational television or radio station;
2438	2438	(tt) all sales of tangible personal property and services purchased by
2439	2439	or on behalf of a not-for-profit corporation that is exempt from federal
2440	2440	income taxation pursuant to section 501(c)(3) of the federal internal
2441	2441	revenue code of 1986, for the sole purpose of constructing a Kansas
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2484	2484	43 HB 2744 30
2485	2485	Korean War memorial;
2486	2486	(uu) all sales of tangible personal property and services purchased by
2487	2487	or on behalf of any rural volunteer fire-fighting organization for use
2488	2488	exclusively in the performance of its duties and functions;
2489	2489	(vv) all sales of tangible personal property purchased by any of the
2490	2490	following organizations that are exempt from federal income taxation
2491	2491	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
2492	2492	for the following purposes, and all sales of any such property by or on
2493	2493	behalf of any such organization for any such purpose:
2494	2494	(1) The American heart association, Kansas affiliate, inc. for the
2495	2495	purposes of providing education, training, certification in emergency
2496	2496	cardiac care, research and other related services to reduce disability and
2497	2497	death from cardiovascular diseases and stroke;
2498	2498	(2) the Kansas alliance for the mentally ill, inc. for the purpose of
2499	2499	advocacy for persons with mental illness and to education, research and
2500	2500	support for their families;
2501	2501	(3) the Kansas mental illness awareness council for the purposes of
2502	2502	advocacy for persons who are mentally ill and for education, research and
2503	2503	support for them and their families;
2504	2504	(4) the American diabetes association Kansas affiliate, inc. for the
2505	2505	purpose of eliminating diabetes through medical research, public education
2506	2506	focusing on disease prevention and education, patient education including
2507	2507	information on coping with diabetes, and professional education and
2508	2508	training;
2509	2509	(5) the American lung association of Kansas, inc. for the purpose of
2510	2510	eliminating all lung diseases through medical research, public education
2511	2511	including information on coping with lung diseases, professional education
2512	2512	and training related to lung disease and other related services to reduce the
2513	2513	incidence of disability and death due to lung disease;
2514	2514	(6) the Kansas chapters of the Alzheimer's disease and related
2515	2515	disorders association, inc. for the purpose of providing assistance and
2516	2516	support to persons in Kansas with Alzheimer's disease, and their families
2517	2517	and caregivers;
2518	2518	(7) the Kansas chapters of the Parkinson's disease association for the
2519	2519	purpose of eliminating Parkinson's disease through medical research and
2520	2520	public and professional education related to such disease;
2521	2521	(8) the national kidney foundation of Kansas and western Missouri
2522	2522	for the purpose of eliminating kidney disease through medical research
2523	2523	and public and private education related to such disease;
2524	2524	(9) the heartstrings community foundation for the purpose of
2525	2525	providing training, employment and activities for adults with
2526	2526	developmental disabilities;
2527	2527	(10) the cystic fibrosis foundation, heart of America chapter, for the
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2571	2571	purposes of assuring the development of the means to cure and control
2572	2572	cystic fibrosis and improving the quality of life for those with the disease;
2573	2573	(11) the spina bifida association of Kansas for the purpose of
2574	2574	providing financial, educational and practical aid to families and
2575	2575	individuals with spina bifida. Such aid includes, but is not limited to,
2576	2576	funding for medical devices, counseling and medical educational
2577	2577	opportunities;
2578	2578	(12) the CHWC, Inc., for the purpose of rebuilding urban core
2579	2579	neighborhoods through the construction of new homes, acquiring and
2580	2580	renovating existing homes and other related activities, and promoting
2581	2581	economic development in such neighborhoods;
2582	2582	(13) the cross-lines cooperative council for the purpose of providing
2583	2583	social services to low income individuals and families;
2584	2584	(14) the dreams work, inc., for the purpose of providing young adult
2585	2585	day services to individuals with developmental disabilities and assisting
2586	2586	families in avoiding institutional or nursing home care for a
2587	2587	developmentally disabled member of their family;
2588	2588	(15) the KSDS, Inc., for the purpose of promoting the independence
2589	2589	and inclusion of people with disabilities as fully participating and
2590	2590	contributing members of their communities and society through the
2591	2591	training and providing of guide and service dogs to people with
2592	2592	disabilities, and providing disability education and awareness to the
2593	2593	general public;
2594	2594	(16) the lyme association of greater Kansas City, Inc., for the purpose
2595	2595	of providing support to persons with lyme disease and public education
2596	2596	relating to the prevention, treatment and cure of lyme disease;
2597	2597	(17) the dream factory, inc., for the purpose of granting the dreams of
2598	2598	children with critical and chronic illnesses;
2599	2599	(18) the Ottawa Suzuki strings, inc., for the purpose of providing
2600	2600	students and families with education and resources necessary to enable
2601	2601	each child to develop fine character and musical ability to the fullest
2602	2602	potential;
2603	2603	(19) the international association of lions clubs for the purpose of
2604	2604	creating and fostering a spirit of understanding among all people for
2605	2605	humanitarian needs by providing voluntary services through community
2606	2606	involvement and international cooperation;
2607	2607	(20) the Johnson county young matrons, inc., for the purpose of
2608	2608	promoting a positive future for members of the community through
2609	2609	volunteerism, financial support and education through the efforts of an all
2610	2610	volunteer organization;
2611	2611	(21) the American cancer society, inc., for the purpose of eliminating
2612	2612	cancer as a major health problem by preventing cancer, saving lives and
2613	2613	diminishing suffering from cancer, through research, education, advocacy
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2656	2656	43 HB 2744 32
2657	2657	and service;
2658	2658	(22) the community services of Shawnee, inc., for the purpose of
2659	2659	providing food and clothing to those in need;
2660	2660	(23) the angel babies association, for the purpose of providing
2661	2661	assistance, support and items of necessity to teenage mothers and their
2662	2662	babies; and
2663	2663	(24) the Kansas fairgrounds foundation for the purpose of the
2664	2664	preservation, renovation and beautification of the Kansas state fairgrounds;
2665	2665	(ww) all sales of tangible personal property purchased by the habitat
2666	2666	for humanity for the exclusive use of being incorporated within a housing
2667	2667	project constructed by such organization;
2668	2668	(xx) all sales of tangible personal property and services purchased by
2669	2669	a nonprofit zoo that is exempt from federal income taxation pursuant to
2670	2670	section 501(c)(3) of the federal internal revenue code of 1986, or on behalf
2671	2671	of such zoo by an entity itself exempt from federal income taxation
2672	2672	pursuant to section 501(c)(3) of the federal internal revenue code of 1986
2673	2673	contracted with to operate such zoo and all sales of tangible personal
2674	2674	property or services purchased by a contractor for the purpose of
2675	2675	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
2676	2676	furnishing or remodeling facilities for any nonprofit zoo that would be
2677	2677	exempt from taxation under the provisions of this section if purchased
2678	2678	directly by such nonprofit zoo or the entity operating such zoo. Nothing in
2679	2679	this subsection shall be deemed to exempt the purchase of any construction
2680	2680	machinery, equipment or tools used in the constructing, equipping,
2681	2681	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
2682	2682	facilities for any nonprofit zoo. When any nonprofit zoo shall contract for
2683	2683	the purpose of constructing, equipping, reconstructing, maintaining,
2684	2684	repairing, enlarging, furnishing or remodeling facilities, it shall obtain
2685	2685	from the state and furnish to the contractor an exemption certificate for the
2686	2686	project involved, and the contractor may purchase materials for
2687	2687	incorporation in such project. The contractor shall furnish the number of
2688	2688	such certificate to all suppliers from whom such purchases are made, and
2689	2689	such suppliers shall execute invoices covering the same bearing the
2690	2690	number of such certificate. Upon completion of the project the contractor
2691	2691	shall furnish to the nonprofit zoo concerned a sworn statement, on a form
2692	2692	to be provided by the director of taxation, that all purchases so made were
2693	2693	entitled to exemption under this subsection. All invoices shall be held by
2694	2694	the contractor for a period of five years and shall be subject to audit by the
2695	2695	director of taxation. If any materials purchased under such a certificate are
2696	2696	found not to have been incorporated in the building or other project or not
2697	2697	to have been returned for credit or the sales or compensating tax otherwise
2698	2698	imposed upon such materials that will not be so incorporated in the
2699	2699	building or other project reported and paid by such contractor to the
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2742	2742	43 HB 2744 33
2743	2743	director of taxation not later than the 20
2744	2744	th
2745	2745	day of the month following the
2746	2746	close of the month in which it shall be determined that such materials will
2747	2747	not be used for the purpose for which such certificate was issued, the
2748	2748	nonprofit zoo concerned shall be liable for tax on all materials purchased
2749	2749	for the project, and upon payment thereof it may recover the same from
2750	2750	the contractor together with reasonable attorney fees. Any contractor or
2751	2751	any agent, employee or subcontractor thereof, who shall use or otherwise
2752	2752	dispose of any materials purchased under such a certificate for any purpose
2753	2753	other than that for which such a certificate is issued without the payment
2754	2754	of the sales or compensating tax otherwise imposed upon such materials,
2755	2755	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
2756	2756	subject to the penalties provided for in K.S.A. 79-3615(h), and
2757	2757	amendments thereto;
2758	2758	(yy) all sales of tangible personal property and services purchased by
2759	2759	a parent-teacher association or organization, and all sales of tangible
2760	2760	personal property by or on behalf of such association or organization;
2761	2761	(zz) all sales of machinery and equipment purchased by over-the-air,
2762	2762	free access radio or television station that is used directly and primarily for
2763	2763	the purpose of producing a broadcast signal or is such that the failure of
2764	2764	the machinery or equipment to operate would cause broadcasting to cease.
2765	2765	For purposes of this subsection, machinery and equipment shall include,
2766	2766	but not be limited to, that required by rules and regulations of the federal
2767	2767	communications commission, and all sales of electricity which are
2768	2768	essential or necessary for the purpose of producing a broadcast signal or is
2769	2769	such that the failure of the electricity would cause broadcasting to cease;
2770	2770	(aaa) all sales of tangible personal property and services purchased by
2771	2771	a religious organization that is exempt from federal income taxation
2772	2772	pursuant to section 501(c)(3) of the federal internal revenue code, and used
2773	2773	exclusively for religious purposes, and all sales of tangible personal
2774	2774	property or services purchased by a contractor for the purpose of
2775	2775	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
2776	2776	furnishing or remodeling facilities for any such organization that would be
2777	2777	exempt from taxation under the provisions of this section if purchased
2778	2778	directly by such organization. Nothing in this subsection shall be deemed
2779	2779	to exempt the purchase of any construction machinery, equipment or tools
2780	2780	used in the constructing, equipping, reconstructing, maintaining, repairing,
2781	2781	enlarging, furnishing or remodeling facilities for any such organization.
2782	2782	When any such organization shall contract for the purpose of constructing,
2783	2783	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
2784	2784	remodeling facilities, it shall obtain from the state and furnish to the
2785	2785	contractor an exemption certificate for the project involved, and the
2786	2786	contractor may purchase materials for incorporation in such project. The
2787	2787	contractor shall furnish the number of such certificate to all suppliers from
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2830	2830	43 HB 2744 34
2831	2831	whom such purchases are made, and such suppliers shall execute invoices
2832	2832	covering the same bearing the number of such certificate. Upon
2833	2833	completion of the project the contractor shall furnish to such organization
2834	2834	concerned a sworn statement, on a form to be provided by the director of
2835	2835	taxation, that all purchases so made were entitled to exemption under this
2836	2836	subsection. All invoices shall be held by the contractor for a period of five
2837	2837	years and shall be subject to audit by the director of taxation. If any
2838	2838	materials purchased under such a certificate are found not to have been
2839	2839	incorporated in the building or other project or not to have been returned
2840	2840	for credit or the sales or compensating tax otherwise imposed upon such
2841	2841	materials that will not be so incorporated in the building or other project
2842	2842	reported and paid by such contractor to the director of taxation not later
2843	2843	than the 20
2844	2844	th
2845	2845	day of the month following the close of the month in which it
2846	2846	shall be determined that such materials will not be used for the purpose for
2847	2847	which such certificate was issued, such organization concerned shall be
2848	2848	liable for tax on all materials purchased for the project, and upon payment
2849	2849	thereof it may recover the same from the contractor together with
2850	2850	reasonable attorney fees. Any contractor or any agent, employee or
2851	2851	subcontractor thereof, who shall use or otherwise dispose of any materials
2852	2852	purchased under such a certificate for any purpose other than that for
2853	2853	which such a certificate is issued without the payment of the sales or
2854	2854	compensating tax otherwise imposed upon such materials, shall be guilty
2855	2855	of a misdemeanor and, upon conviction therefor, shall be subject to the
2856	2856	penalties provided for in K.S.A. 79-3615(h), and amendments thereto.
2857	2857	Sales tax paid on and after July 1, 1998, but prior to the effective date of
2858	2858	this act upon the gross receipts received from any sale exempted by the
2859	2859	amendatory provisions of this subsection shall be refunded. Each claim for
2860	2860	a sales tax refund shall be verified and submitted to the director of taxation
2861	2861	upon forms furnished by the director and shall be accompanied by any
2862	2862	additional documentation required by the director. The director shall
2863	2863	review each claim and shall refund that amount of sales tax paid as
2864	2864	determined under the provisions of this subsection. All refunds shall be
2865	2865	paid from the sales tax refund fund upon warrants of the director of
2866	2866	accounts and reports pursuant to vouchers approved by the director or the
2867	2867	director's designee;
2868	2868	(bbb) all sales of food for human consumption by an organization that
2869	2869	is exempt from federal income taxation pursuant to section 501(c)(3) of
2870	2870	the federal internal revenue code of 1986, pursuant to a food distribution
2871	2871	program that offers such food at a price below cost in exchange for the
2872	2872	performance of community service by the purchaser thereof;
2873	2873	(ccc) on and after July 1, 1999, all sales of tangible personal property
2874	2874	and services purchased by a primary care clinic or health center the
2875	2875	primary purpose of which is to provide services to medically underserved
2876	2876	1
2877	2877	2
2878	2878	3
2879	2879	4
2880	2880	5
2881	2881	6
2882	2882	7
2883	2883	8
2884	2884	9
2885	2885	10
2886	2886	11
2887	2887	12
2888	2888	13
2889	2889	14
2890	2890	15
2891	2891	16
2892	2892	17
2893	2893	18
2894	2894	19
2895	2895	20
2896	2896	21
2897	2897	22
2898	2898	23
2899	2899	24
2900	2900	25
2901	2901	26
2902	2902	27
2903	2903	28
2904	2904	29
2905	2905	30
2906	2906	31
2907	2907	32
2908	2908	33
2909	2909	34
2910	2910	35
2911	2911	36
2912	2912	37
2913	2913	38
2914	2914	39
2915	2915	40
2916	2916	41
2917	2917	42
2918	2918	43 HB 2744 35
2919	2919	individuals and families, and that is exempt from federal income taxation
2920	2920	pursuant to section 501(c)(3) of the federal internal revenue code, and all
2921	2921	sales of tangible personal property or services purchased by a contractor
2922	2922	for the purpose of constructing, equipping, reconstructing, maintaining,
2923	2923	repairing, enlarging, furnishing or remodeling facilities for any such clinic
2924	2924	or center that would be exempt from taxation under the provisions of this
2925	2925	section if purchased directly by such clinic or center, except that for
2926	2926	taxable years commencing after December 31, 2013, this subsection shall
2927	2927	not apply to any sales of such tangible personal property and services
2928	2928	purchased by a primary care clinic or health center which performs any
2929	2929	abortion, as defined in K.S.A. 65-6701, and amendments thereto. Nothing
2930	2930	in this subsection shall be deemed to exempt the purchase of any
2931	2931	construction machinery, equipment or tools used in the constructing,
2932	2932	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
2933	2933	remodeling facilities for any such clinic or center. When any such clinic or
2934	2934	center shall contract for the purpose of constructing, equipping,
2935	2935	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
2936	2936	facilities, it shall obtain from the state and furnish to the contractor an
2937	2937	exemption certificate for the project involved, and the contractor may
2938	2938	purchase materials for incorporation in such project. The contractor shall
2939	2939	furnish the number of such certificate to all suppliers from whom such
2940	2940	purchases are made, and such suppliers shall execute invoices covering the
2941	2941	same bearing the number of such certificate. Upon completion of the
2942	2942	project the contractor shall furnish to such clinic or center concerned a
2943	2943	sworn statement, on a form to be provided by the director of taxation, that
2944	2944	all purchases so made were entitled to exemption under this subsection.
2945	2945	All invoices shall be held by the contractor for a period of five years and
2946	2946	shall be subject to audit by the director of taxation. If any materials
2947	2947	purchased under such a certificate are found not to have been incorporated
2948	2948	in the building or other project or not to have been returned for credit or
2949	2949	the sales or compensating tax otherwise imposed upon such materials that
2950	2950	will not be so incorporated in the building or other project reported and
2951	2951	paid by such contractor to the director of taxation not later than the 20
2952	2952	th
2953	2953	day of the month following the close of the month in which it shall be
2954	2954	determined that such materials will not be used for the purpose for which
2955	2955	such certificate was issued, such clinic or center concerned shall be liable
2956	2956	for tax on all materials purchased for the project, and upon payment
2957	2957	thereof it may recover the same from the contractor together with
2958	2958	reasonable attorney fees. Any contractor or any agent, employee or
2959	2959	subcontractor thereof, who shall use or otherwise dispose of any materials
2960	2960	purchased under such a certificate for any purpose other than that for
2961	2961	which such a certificate is issued without the payment of the sales or
2962	2962	compensating tax otherwise imposed upon such materials, shall be guilty
2963	2963	1
2964	2964	2
2965	2965	3
2966	2966	4
2967	2967	5
2968	2968	6
2969	2969	7
2970	2970	8
2971	2971	9
2972	2972	10
2973	2973	11
2974	2974	12
2975	2975	13
2976	2976	14
2977	2977	15
2978	2978	16
2979	2979	17
2980	2980	18
2981	2981	19
2982	2982	20
2983	2983	21
2984	2984	22
2985	2985	23
2986	2986	24
2987	2987	25
2988	2988	26
2989	2989	27
2990	2990	28
2991	2991	29
2992	2992	30
2993	2993	31
2994	2994	32
2995	2995	33
2996	2996	34
2997	2997	35
2998	2998	36
2999	2999	37
3000	3000	38
3001	3001	39
3002	3002	40
3003	3003	41
3004	3004	42
3005	3005	43 HB 2744 36
3006	3006	of a misdemeanor and, upon conviction therefor, shall be subject to the
3007	3007	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3008	3008	(ddd) on and after January 1, 1999, and before January 1, 2000, all
3009	3009	sales of materials and services purchased by any class II or III railroad as
3010	3010	classified by the federal surface transportation board for the construction,
3011	3011	renovation, repair or replacement of class II or III railroad track and
3012	3012	facilities used directly in interstate commerce. In the event any such track
3013	3013	or facility for which materials and services were purchased sales tax
3014	3014	exempt is not operational for five years succeeding the allowance of such
3015	3015	exemption, the total amount of sales tax that would have been payable
3016	3016	except for the operation of this subsection shall be recouped in accordance
3017	3017	with rules and regulations adopted for such purpose by the secretary of
3018	3018	revenue;
3019	3019	(eee) on and after January 1, 1999, and before January 1, 2001, all
3020	3020	sales of materials and services purchased for the original construction,
3021	3021	reconstruction, repair or replacement of grain storage facilities, including
3022	3022	railroad sidings providing access thereto;
3023	3023	(fff) all sales of material handling equipment, racking systems and
3024	3024	other related machinery and equipment that is used for the handling,
3025	3025	movement or storage of tangible personal property in a warehouse or
3026	3026	distribution facility in this state; all sales of installation, repair and
3027	3027	maintenance services performed on such machinery and equipment; and
3028	3028	all sales of repair and replacement parts for such machinery and
3029	3029	equipment. For purposes of this subsection, a warehouse or distribution
3030	3030	facility means a single, fixed location that consists of buildings or
3031	3031	structures in a contiguous area where storage or distribution operations are
3032	3032	conducted that are separate and apart from the business' retail operations,
3033	3033	if any, and that do not otherwise qualify for exemption as occurring at a
3034	3034	manufacturing or processing plant or facility. Material handling and
3035	3035	storage equipment shall include aeration, dust control, cleaning, handling
3036	3036	and other such equipment that is used in a public grain warehouse or other
3037	3037	commercial grain storage facility, whether used for grain handling, grain
3038	3038	storage, grain refining or processing, or other grain treatment operation;
3039	3039	(ggg) all sales of tangible personal property and services purchased
3040	3040	by or on behalf of the Kansas academy of science, which is exempt from
3041	3041	federal income taxation pursuant to section 501(c)(3) of the federal
3042	3042	internal revenue code of 1986, and used solely by such academy for the
3043	3043	preparation, publication and dissemination of education materials;
3044	3044	(hhh) all sales of tangible personal property and services purchased
3045	3045	by or on behalf of all domestic violence shelters that are member agencies
3046	3046	of the Kansas coalition against sexual and domestic violence;
3047	3047	(iii) all sales of personal property and services purchased by an
3048	3048	organization that is exempt from federal income taxation pursuant to
3049	3049	1
3050	3050	2
3051	3051	3
3052	3052	4
3053	3053	5
3054	3054	6
3055	3055	7
3056	3056	8
3057	3057	9
3058	3058	10
3059	3059	11
3060	3060	12
3061	3061	13
3062	3062	14
3063	3063	15
3064	3064	16
3065	3065	17
3066	3066	18
3067	3067	19
3068	3068	20
3069	3069	21
3070	3070	22
3071	3071	23
3072	3072	24
3073	3073	25
3074	3074	26
3075	3075	27
3076	3076	28
3077	3077	29
3078	3078	30
3079	3079	31
3080	3080	32
3081	3081	33
3082	3082	34
3083	3083	35
3084	3084	36
3085	3085	37
3086	3086	38
3087	3087	39
3088	3088	40
3089	3089	41
3090	3090	42
3091	3091	43 HB 2744 37
3092	3092	section 501(c)(3) of the federal internal revenue code of 1986, and such
3093	3093	personal property and services are used by any such organization in the
3094	3094	collection, storage and distribution of food products to nonprofit
3095	3095	organizations that distribute such food products to persons pursuant to a
3096	3096	food distribution program on a charitable basis without fee or charge, and
3097	3097	all sales of tangible personal property or services purchased by a
3098	3098	contractor for the purpose of constructing, equipping, reconstructing,
3099	3099	maintaining, repairing, enlarging, furnishing or remodeling facilities used
3100	3100	for the collection and storage of such food products for any such
3101	3101	organization which is exempt from federal income taxation pursuant to
3102	3102	section 501(c)(3) of the federal internal revenue code of 1986, that would
3103	3103	be exempt from taxation under the provisions of this section if purchased
3104	3104	directly by such organization. Nothing in this subsection shall be deemed
3105	3105	to exempt the purchase of any construction machinery, equipment or tools
3106	3106	used in the constructing, equipping, reconstructing, maintaining, repairing,
3107	3107	enlarging, furnishing or remodeling facilities for any such organization.
3108	3108	When any such organization shall contract for the purpose of constructing,
3109	3109	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3110	3110	remodeling facilities, it shall obtain from the state and furnish to the
3111	3111	contractor an exemption certificate for the project involved, and the
3112	3112	contractor may purchase materials for incorporation in such project. The
3113	3113	contractor shall furnish the number of such certificate to all suppliers from
3114	3114	whom such purchases are made, and such suppliers shall execute invoices
3115	3115	covering the same bearing the number of such certificate. Upon
3116	3116	completion of the project the contractor shall furnish to such organization
3117	3117	concerned a sworn statement, on a form to be provided by the director of
3118	3118	taxation, that all purchases so made were entitled to exemption under this
3119	3119	subsection. All invoices shall be held by the contractor for a period of five
3120	3120	years and shall be subject to audit by the director of taxation. If any
3121	3121	materials purchased under such a certificate are found not to have been
3122	3122	incorporated in such facilities or not to have been returned for credit or the
3123	3123	sales or compensating tax otherwise imposed upon such materials that will
3124	3124	not be so incorporated in such facilities reported and paid by such
3125	3125	contractor to the director of taxation not later than the 20
3126	3126	th
3127	3127	day of the
3128	3128	month following the close of the month in which it shall be determined
3129	3129	that such materials will not be used for the purpose for which such
3130	3130	certificate was issued, such organization concerned shall be liable for tax
3131	3131	on all materials purchased for the project, and upon payment thereof it
3132	3132	may recover the same from the contractor together with reasonable
3133	3133	attorney fees. Any contractor or any agent, employee or subcontractor
3134	3134	thereof, who shall use or otherwise dispose of any materials purchased
3135	3135	under such a certificate for any purpose other than that for which such a
3136	3136	certificate is issued without the payment of the sales or compensating tax
3137	3137	1
3138	3138	2
3139	3139	3
3140	3140	4
3141	3141	5
3142	3142	6
3143	3143	7
3144	3144	8
3145	3145	9
3146	3146	10
3147	3147	11
3148	3148	12
3149	3149	13
3150	3150	14
3151	3151	15
3152	3152	16
3153	3153	17
3154	3154	18
3155	3155	19
3156	3156	20
3157	3157	21
3158	3158	22
3159	3159	23
3160	3160	24
3161	3161	25
3162	3162	26
3163	3163	27
3164	3164	28
3165	3165	29
3166	3166	30
3167	3167	31
3168	3168	32
3169	3169	33
3170	3170	34
3171	3171	35
3172	3172	36
3173	3173	37
3174	3174	38
3175	3175	39
3176	3176	40
3177	3177	41
3178	3178	42
3179	3179	43 HB 2744 38
3180	3180	otherwise imposed upon such materials, shall be guilty of a misdemeanor
3181	3181	and, upon conviction therefor, shall be subject to the penalties provided for
3182	3182	in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and after
3183	3183	July 1, 2005, but prior to the effective date of this act upon the gross
3184	3184	receipts received from any sale exempted by the amendatory provisions of
3185	3185	this subsection shall be refunded. Each claim for a sales tax refund shall be
3186	3186	verified and submitted to the director of taxation upon forms furnished by
3187	3187	the director and shall be accompanied by any additional documentation
3188	3188	required by the director. The director shall review each claim and shall
3189	3189	refund that amount of sales tax paid as determined under the provisions of
3190	3190	this subsection. All refunds shall be paid from the sales tax refund fund
3191	3191	upon warrants of the director of accounts and reports pursuant to vouchers
3192	3192	approved by the director or the director's designee;
3193	3193	(jjj) all sales of dietary supplements dispensed pursuant to a
3194	3194	prescription order by a licensed practitioner or a mid-level practitioner as
3195	3195	defined by K.S.A. 65-1626, and amendments thereto. As used in this
3196	3196	subsection, "dietary supplement" means any product, other than tobacco,
3197	3197	intended to supplement the diet that: (1) Contains one or more of the
3198	3198	following dietary ingredients: A vitamin, a mineral, an herb or other
3199	3199	botanical, an amino acid, a dietary substance for use by humans to
3200	3200	supplement the diet by increasing the total dietary intake or a concentrate,
3201	3201	metabolite, constituent, extract or combination of any such ingredient; (2)
3202	3202	is intended for ingestion in tablet, capsule, powder, softgel, gelcap or
3203	3203	liquid form, or if not intended for ingestion, in such a form, is not
3204	3204	represented as conventional food and is not represented for use as a sole
3205	3205	item of a meal or of the diet; and (3) is required to be labeled as a dietary
3206	3206	supplement, identifiable by the supplemental facts box found on the label
3207	3207	and as required pursuant to 21 C.F.R. § 101.36;
3208	3208	(lll) all sales of tangible personal property and services purchased by
3209	3209	special olympics Kansas, inc. for the purpose of providing year-round
3210	3210	sports training and athletic competition in a variety of olympic-type sports
3211	3211	for individuals with intellectual disabilities by giving them continuing
3212	3212	opportunities to develop physical fitness, demonstrate courage, experience
3213	3213	joy and participate in a sharing of gifts, skills and friendship with their
3214	3214	families, other special olympics athletes and the community, and activities
3215	3215	provided or sponsored by such organization, and all sales of tangible
3216	3216	personal property by or on behalf of any such organization;
3217	3217	(mmm) all sales of tangible personal property purchased by or on
3218	3218	behalf of the Marillac center, inc., which is exempt from federal income
3219	3219	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3220	3220	for the purpose of providing psycho-social-biological and special
3221	3221	education services to children, and all sales of any such property by or on
3222	3222	behalf of such organization for such purpose;
3223	3223	1
3224	3224	2
3225	3225	3
3226	3226	4
3227	3227	5
3228	3228	6
3229	3229	7
3230	3230	8
3231	3231	9
3232	3232	10
3233	3233	11
3234	3234	12
3235	3235	13
3236	3236	14
3237	3237	15
3238	3238	16
3239	3239	17
3240	3240	18
3241	3241	19
3242	3242	20
3243	3243	21
3244	3244	22
3245	3245	23
3246	3246	24
3247	3247	25
3248	3248	26
3249	3249	27
3250	3250	28
3251	3251	29
3252	3252	30
3253	3253	31
3254	3254	32
3255	3255	33
3256	3256	34
3257	3257	35
3258	3258	36
3259	3259	37
3260	3260	38
3261	3261	39
3262	3262	40
3263	3263	41
3264	3264	42
3265	3265	43 HB 2744 39
3266	3266	(nnn) all sales of tangible personal property and services purchased
3267	3267	by the west Sedgwick county-sunrise rotary club and sunrise charitable
3268	3268	fund for the purpose of constructing a boundless playground which is an
3269	3269	integrated, barrier free and developmentally advantageous play
3270	3270	environment for children of all abilities and disabilities;
3271	3271	(ooo) all sales of tangible personal property by or on behalf of a
3272	3272	public library serving the general public and supported in whole or in part
3273	3273	with tax money or a not-for-profit organization whose purpose is to raise
3274	3274	funds for or provide services or other benefits to any such public library;
3275	3275	(ppp) all sales of tangible personal property and services purchased
3276	3276	by or on behalf of a homeless shelter that is exempt from federal income
3277	3277	taxation pursuant to section 501(c)(3) of the federal income tax code of
3278	3278	1986, and used by any such homeless shelter to provide emergency and
3279	3279	transitional housing for individuals and families experiencing
3280	3280	homelessness, and all sales of any such property by or on behalf of any
3281	3281	such homeless shelter for any such purpose;
3282	3282	(qqq) all sales of tangible personal property and services purchased
3283	3283	by TLC for children and families, inc., hereinafter referred to as TLC,
3284	3284	which is exempt from federal income taxation pursuant to section 501(c)
3285	3285	(3) of the federal internal revenue code of 1986, and such property and
3286	3286	services are used for the purpose of providing emergency shelter and
3287	3287	treatment for abused and neglected children as well as meeting additional
3288	3288	critical needs for children, juveniles and family, and all sales of any such
3289	3289	property by or on behalf of TLC for any such purpose; and all sales of
3290	3290	tangible personal property or services purchased by a contractor for the
3291	3291	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3292	3292	remodeling facilities for the operation of services for TLC for any such
3293	3293	purpose that would be exempt from taxation under the provisions of this
3294	3294	section if purchased directly by TLC. Nothing in this subsection shall be
3295	3295	deemed to exempt the purchase of any construction machinery, equipment
3296	3296	or tools used in the constructing, maintaining, repairing, enlarging,
3297	3297	furnishing or remodeling such facilities for TLC. When TLC contracts for
3298	3298	the purpose of constructing, maintaining, repairing, enlarging, furnishing
3299	3299	or remodeling such facilities, it shall obtain from the state and furnish to
3300	3300	the contractor an exemption certificate for the project involved, and the
3301	3301	contractor may purchase materials for incorporation in such project. The
3302	3302	contractor shall furnish the number of such certificate to all suppliers from
3303	3303	whom such purchases are made, and such suppliers shall execute invoices
3304	3304	covering the same bearing the number of such certificate. Upon
3305	3305	completion of the project the contractor shall furnish to TLC a sworn
3306	3306	statement, on a form to be provided by the director of taxation, that all
3307	3307	purchases so made were entitled to exemption under this subsection. All
3308	3308	invoices shall be held by the contractor for a period of five years and shall
3309	3309	1
3310	3310	2
3311	3311	3
3312	3312	4
3313	3313	5
3314	3314	6
3315	3315	7
3316	3316	8
3317	3317	9
3318	3318	10
3319	3319	11
3320	3320	12
3321	3321	13
3322	3322	14
3323	3323	15
3324	3324	16
3325	3325	17
3326	3326	18
3327	3327	19
3328	3328	20
3329	3329	21
3330	3330	22
3331	3331	23
3332	3332	24
3333	3333	25
3334	3334	26
3335	3335	27
3336	3336	28
3337	3337	29
3338	3338	30
3339	3339	31
3340	3340	32
3341	3341	33
3342	3342	34
3343	3343	35
3344	3344	36
3345	3345	37
3346	3346	38
3347	3347	39
3348	3348	40
3349	3349	41
3350	3350	42
3351	3351	43 HB 2744 40
3352	3352	be subject to audit by the director of taxation. If any materials purchased
3353	3353	under such a certificate are found not to have been incorporated in the
3354	3354	building or other project or not to have been returned for credit or the sales
3355	3355	or compensating tax otherwise imposed upon such materials that will not
3356	3356	be so incorporated in the building or other project reported and paid by
3357	3357	such contractor to the director of taxation not later than the 20
3358	3358	th
3359	3359	day of the
3360	3360	month following the close of the month in which it shall be determined
3361	3361	that such materials will not be used for the purpose for which such
3362	3362	certificate was issued, TLC shall be liable for tax on all materials
3363	3363	purchased for the project, and upon payment thereof it may recover the
3364	3364	same from the contractor together with reasonable attorney fees. Any
3365	3365	contractor or any agent, employee or subcontractor thereof, who shall use
3366	3366	or otherwise dispose of any materials purchased under such a certificate
3367	3367	for any purpose other than that for which such a certificate is issued
3368	3368	without the payment of the sales or compensating tax otherwise imposed
3369	3369	upon such materials, shall be guilty of a misdemeanor and, upon
3370	3370	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3371	3371	79-3615(h), and amendments thereto;
3372	3372	(rrr) all sales of tangible personal property and services purchased by
3373	3373	any county law library maintained pursuant to law and sales of tangible
3374	3374	personal property and services purchased by an organization that would
3375	3375	have been exempt from taxation under the provisions of this subsection if
3376	3376	purchased directly by the county law library for the purpose of providing
3377	3377	legal resources to attorneys, judges, students and the general public, and
3378	3378	all sales of any such property by or on behalf of any such county law
3379	3379	library;
3380	3380	(sss) all sales of tangible personal property and services purchased by
3381	3381	catholic charities or youthville, hereinafter referred to as charitable family
3382	3382	providers, which is exempt from federal income taxation pursuant to
3383	3383	section 501(c)(3) of the federal internal revenue code of 1986, and which
3384	3384	such property and services are used for the purpose of providing
3385	3385	emergency shelter and treatment for abused and neglected children as well
3386	3386	as meeting additional critical needs for children, juveniles and family, and
3387	3387	all sales of any such property by or on behalf of charitable family
3388	3388	providers for any such purpose; and all sales of tangible personal property
3389	3389	or services purchased by a contractor for the purpose of constructing,
3390	3390	maintaining, repairing, enlarging, furnishing or remodeling facilities for
3391	3391	the operation of services for charitable family providers for any such
3392	3392	purpose which would be exempt from taxation under the provisions of this
3393	3393	section if purchased directly by charitable family providers. Nothing in
3394	3394	this subsection shall be deemed to exempt the purchase of any construction
3395	3395	machinery, equipment or tools used in the constructing, maintaining,
3396	3396	repairing, enlarging, furnishing or remodeling such facilities for charitable
3397	3397	1
3398	3398	2
3399	3399	3
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3426	3426	30
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3433	3433	37
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3435	3435	39
3436	3436	40
3437	3437	41
3438	3438	42
3439	3439	43 HB 2744 41
3440	3440	family providers. When charitable family providers contracts for the
3441	3441	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3442	3442	remodeling such facilities, it shall obtain from the state and furnish to the
3443	3443	contractor an exemption certificate for the project involved, and the
3444	3444	contractor may purchase materials for incorporation in such project. The
3445	3445	contractor shall furnish the number of such certificate to all suppliers from
3446	3446	whom such purchases are made, and such suppliers shall execute invoices
3447	3447	covering the same bearing the number of such certificate. Upon
3448	3448	completion of the project the contractor shall furnish to charitable family
3449	3449	providers a sworn statement, on a form to be provided by the director of
3450	3450	taxation, that all purchases so made were entitled to exemption under this
3451	3451	subsection. All invoices shall be held by the contractor for a period of five
3452	3452	years and shall be subject to audit by the director of taxation. If any
3453	3453	materials purchased under such a certificate are found not to have been
3454	3454	incorporated in the building or other project or not to have been returned
3455	3455	for credit or the sales or compensating tax otherwise imposed upon such
3456	3456	materials that will not be so incorporated in the building or other project
3457	3457	reported and paid by such contractor to the director of taxation not later
3458	3458	than the 20
3459	3459	th
3460	3460	day of the month following the close of the month in which it
3461	3461	shall be determined that such materials will not be used for the purpose for
3462	3462	which such certificate was issued, charitable family providers shall be
3463	3463	liable for tax on all materials purchased for the project, and upon payment
3464	3464	thereof it may recover the same from the contractor together with
3465	3465	reasonable attorney fees. Any contractor or any agent, employee or
3466	3466	subcontractor thereof, who shall use or otherwise dispose of any materials
3467	3467	purchased under such a certificate for any purpose other than that for
3468	3468	which such a certificate is issued without the payment of the sales or
3469	3469	compensating tax otherwise imposed upon such materials, shall be guilty
3470	3470	of a misdemeanor and, upon conviction therefor, shall be subject to the
3471	3471	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3472	3472	(ttt) all sales of tangible personal property or services purchased by a
3473	3473	contractor for a project for the purpose of restoring, constructing,
3474	3474	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3475	3475	remodeling a home or facility owned by a nonprofit museum that has been
3476	3476	granted an exemption pursuant to subsection (qq), which such home or
3477	3477	facility is located in a city that has been designated as a qualified
3478	3478	hometown pursuant to the provisions of K.S.A. 75-5071 et seq., and
3479	3479	amendments thereto, and which such project is related to the purposes of
3480	3480	K.S.A. 75-5071 et seq., and amendments thereto, and that would be
3481	3481	exempt from taxation under the provisions of this section if purchased
3482	3482	directly by such nonprofit museum. Nothing in this subsection shall be
3483	3483	deemed to exempt the purchase of any construction machinery, equipment
3484	3484	or tools used in the restoring, constructing, equipping, reconstructing,
3485	3485	1
3486	3486	2
3487	3487	3
3488	3488	4
3489	3489	5
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3513	3513	29
3514	3514	30
3515	3515	31
3516	3516	32
3517	3517	33
3518	3518	34
3519	3519	35
3520	3520	36
3521	3521	37
3522	3522	38
3523	3523	39
3524	3524	40
3525	3525	41
3526	3526	42
3527	3527	43 HB 2744 42
3528	3528	maintaining, repairing, enlarging, furnishing or remodeling a home or
3529	3529	facility for any such nonprofit museum. When any such nonprofit museum
3530	3530	shall contract for the purpose of restoring, constructing, equipping,
3531	3531	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3532	3532	a home or facility, it shall obtain from the state and furnish to the
3533	3533	contractor an exemption certificate for the project involved, and the
3534	3534	contractor may purchase materials for incorporation in such project. The
3535	3535	contractor shall furnish the number of such certificates to all suppliers
3536	3536	from whom such purchases are made, and such suppliers shall execute
3537	3537	invoices covering the same bearing the number of such certificate. Upon
3538	3538	completion of the project, the contractor shall furnish to such nonprofit
3539	3539	museum a sworn statement on a form to be provided by the director of
3540	3540	taxation that all purchases so made were entitled to exemption under this
3541	3541	subsection. All invoices shall be held by the contractor for a period of five
3542	3542	years and shall be subject to audit by the director of taxation. If any
3543	3543	materials purchased under such a certificate are found not to have been
3544	3544	incorporated in the building or other project or not to have been returned
3545	3545	for credit or the sales or compensating tax otherwise imposed upon such
3546	3546	materials that will not be so incorporated in a home or facility or other
3547	3547	project reported and paid by such contractor to the director of taxation not
3548	3548	later than the 20
3549	3549	th
3550	3550	day of the month following the close of the month in
3551	3551	which it shall be determined that such materials will not be used for the
3552	3552	purpose for which such certificate was issued, such nonprofit museum
3553	3553	shall be liable for tax on all materials purchased for the project, and upon
3554	3554	payment thereof it may recover the same from the contractor together with
3555	3555	reasonable attorney fees. Any contractor or any agent, employee or
3556	3556	subcontractor thereof, who shall use or otherwise dispose of any materials
3557	3557	purchased under such a certificate for any purpose other than that for
3558	3558	which such a certificate is issued without the payment of the sales or
3559	3559	compensating tax otherwise imposed upon such materials, shall be guilty
3560	3560	of a misdemeanor and, upon conviction therefor, shall be subject to the
3561	3561	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3562	3562	(uuu) all sales of tangible personal property and services purchased
3563	3563	by Kansas children's service league, hereinafter referred to as KCSL,
3564	3564	which is exempt from federal income taxation pursuant to section 501(c)
3565	3565	(3) of the federal internal revenue code of 1986, and which such property
3566	3566	and services are used for the purpose of providing for the prevention and
3567	3567	treatment of child abuse and maltreatment as well as meeting additional
3568	3568	critical needs for children, juveniles and family, and all sales of any such
3569	3569	property by or on behalf of KCSL for any such purpose; and all sales of
3570	3570	tangible personal property or services purchased by a contractor for the
3571	3571	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3572	3572	remodeling facilities for the operation of services for KCSL for any such
3573	3573	1
3574	3574	2
3575	3575	3
3576	3576	4
3577	3577	5
3578	3578	6
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3609	3609	37
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3612	3612	40
3613	3613	41
3614	3614	42
3615	3615	43 HB 2744 43
3616	3616	purpose that would be exempt from taxation under the provisions of this
3617	3617	section if purchased directly by KCSL. Nothing in this subsection shall be
3618	3618	deemed to exempt the purchase of any construction machinery, equipment
3619	3619	or tools used in the constructing, maintaining, repairing, enlarging,
3620	3620	furnishing or remodeling such facilities for KCSL. When KCSL contracts
3621	3621	for the purpose of constructing, maintaining, repairing, enlarging,
3622	3622	furnishing or remodeling such facilities, it shall obtain from the state and
3623	3623	furnish to the contractor an exemption certificate for the project involved,
3624	3624	and the contractor may purchase materials for incorporation in such
3625	3625	project. The contractor shall furnish the number of such certificate to all
3626	3626	suppliers from whom such purchases are made, and such suppliers shall
3627	3627	execute invoices covering the same bearing the number of such certificate.
3628	3628	Upon completion of the project the contractor shall furnish to KCSL a
3629	3629	sworn statement, on a form to be provided by the director of taxation, that
3630	3630	all purchases so made were entitled to exemption under this subsection.
3631	3631	All invoices shall be held by the contractor for a period of five years and
3632	3632	shall be subject to audit by the director of taxation. If any materials
3633	3633	purchased under such a certificate are found not to have been incorporated
3634	3634	in the building or other project or not to have been returned for credit or
3635	3635	the sales or compensating tax otherwise imposed upon such materials that
3636	3636	will not be so incorporated in the building or other project reported and
3637	3637	paid by such contractor to the director of taxation not later than the 20
3638	3638	th
3639	3639	day of the month following the close of the month in which it shall be
3640	3640	determined that such materials will not be used for the purpose for which
3641	3641	such certificate was issued, KCSL shall be liable for tax on all materials
3642	3642	purchased for the project, and upon payment thereof it may recover the
3643	3643	same from the contractor together with reasonable attorney fees. Any
3644	3644	contractor or any agent, employee or subcontractor thereof, who shall use
3645	3645	or otherwise dispose of any materials purchased under such a certificate
3646	3646	for any purpose other than that for which such a certificate is issued
3647	3647	without the payment of the sales or compensating tax otherwise imposed
3648	3648	upon such materials, shall be guilty of a misdemeanor and, upon
3649	3649	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3650	3650	79-3615(h), and amendments thereto;
3651	3651	(vvv) all sales of tangible personal property or services, including the
3652	3652	renting and leasing of tangible personal property or services, purchased by
3653	3653	jazz in the woods, inc., a Kansas corporation that is exempt from federal
3654	3654	income taxation pursuant to section 501(c)(3) of the federal internal
3655	3655	revenue code, for the purpose of providing jazz in the woods, an event
3656	3656	benefiting children-in-need and other nonprofit charities assisting such
3657	3657	children, and all sales of any such property by or on behalf of such
3658	3658	organization for such purpose;
3659	3659	(www) all sales of tangible personal property purchased by or on
3660	3660	1
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3662	3662	3
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3691	3691	32
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3699	3699	40
3700	3700	41
3701	3701	42
3702	3702	43 HB 2744 44
3703	3703	behalf of the Frontenac education foundation, which is exempt from
3704	3704	federal income taxation pursuant to section 501(c)(3) of the federal
3705	3705	internal revenue code, for the purpose of providing education support for
3706	3706	students, and all sales of any such property by or on behalf of such
3707	3707	organization for such purpose;
3708	3708	(xxx) all sales of personal property and services purchased by the
3709	3709	booth theatre foundation, inc., an organization, which is exempt from
3710	3710	federal income taxation pursuant to section 501(c)(3) of the federal
3711	3711	internal revenue code of 1986, and which such personal property and
3712	3712	services are used by any such organization in the constructing, equipping,
3713	3713	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3714	3714	of the booth theatre, and all sales of tangible personal property or services
3715	3715	purchased by a contractor for the purpose of constructing, equipping,
3716	3716	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3717	3717	the booth theatre for such organization, that would be exempt from
3718	3718	taxation under the provisions of this section if purchased directly by such
3719	3719	organization. Nothing in this subsection shall be deemed to exempt the
3720	3720	purchase of any construction machinery, equipment or tools used in the
3721	3721	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
3722	3722	furnishing or remodeling facilities for any such organization. When any
3723	3723	such organization shall contract for the purpose of constructing, equipping,
3724	3724	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3725	3725	facilities, it shall obtain from the state and furnish to the contractor an
3726	3726	exemption certificate for the project involved, and the contractor may
3727	3727	purchase materials for incorporation in such project. The contractor shall
3728	3728	furnish the number of such certificate to all suppliers from whom such
3729	3729	purchases are made, and such suppliers shall execute invoices covering the
3730	3730	same bearing the number of such certificate. Upon completion of the
3731	3731	project the contractor shall furnish to such organization concerned a sworn
3732	3732	statement, on a form to be provided by the director of taxation, that all
3733	3733	purchases so made were entitled to exemption under this subsection. All
3734	3734	invoices shall be held by the contractor for a period of five years and shall
3735	3735	be subject to audit by the director of taxation. If any materials purchased
3736	3736	under such a certificate are found not to have been incorporated in such
3737	3737	facilities or not to have been returned for credit or the sales or
3738	3738	compensating tax otherwise imposed upon such materials that will not be
3739	3739	so incorporated in such facilities reported and paid by such contractor to
3740	3740	the director of taxation not later than the 20
3741	3741	th
3742	3742	day of the month following
3743	3743	the close of the month in which it shall be determined that such materials
3744	3744	will not be used for the purpose for which such certificate was issued, such
3745	3745	organization concerned shall be liable for tax on all materials purchased
3746	3746	for the project, and upon payment thereof it may recover the same from
3747	3747	the contractor together with reasonable attorney fees. Any contractor or
3748	3748	1
3749	3749	2
3750	3750	3
3751	3751	4
3752	3752	5
3753	3753	6
3754	3754	7
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3784	3784	37
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3786	3786	39
3787	3787	40
3788	3788	41
3789	3789	42
3790	3790	43 HB 2744 45
3791	3791	any agent, employee or subcontractor thereof, who shall use or otherwise
3792	3792	dispose of any materials purchased under such a certificate for any purpose
3793	3793	other than that for which such a certificate is issued without the payment
3794	3794	of the sales or compensating tax otherwise imposed upon such materials,
3795	3795	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
3796	3796	subject to the penalties provided for in K.S.A. 79-3615(h), and
3797	3797	amendments thereto. Sales tax paid on and after January 1, 2007, but prior
3798	3798	to the effective date of this act upon the gross receipts received from any
3799	3799	sale which would have been exempted by the provisions of this subsection
3800	3800	had such sale occurred after the effective date of this act shall be refunded.
3801	3801	Each claim for a sales tax refund shall be verified and submitted to the
3802	3802	director of taxation upon forms furnished by the director and shall be
3803	3803	accompanied by any additional documentation required by the director.
3804	3804	The director shall review each claim and shall refund that amount of sales
3805	3805	tax paid as determined under the provisions of this subsection. All refunds
3806	3806	shall be paid from the sales tax refund fund upon warrants of the director
3807	3807	of accounts and reports pursuant to vouchers approved by the director or
3808	3808	the director's designee;
3809	3809	(yyy) all sales of tangible personal property and services purchased
3810	3810	by TLC charities foundation, inc., hereinafter referred to as TLC charities,
3811	3811	which is exempt from federal income taxation pursuant to section 501(c)
3812	3812	(3) of the federal internal revenue code of 1986, and which such property
3813	3813	and services are used for the purpose of encouraging private philanthropy
3814	3814	to further the vision, values, and goals of TLC for children and families,
3815	3815	inc.; and all sales of such property and services by or on behalf of TLC
3816	3816	charities for any such purpose and all sales of tangible personal property or
3817	3817	services purchased by a contractor for the purpose of constructing,
3818	3818	maintaining, repairing, enlarging, furnishing or remodeling facilities for
3819	3819	the operation of services for TLC charities for any such purpose that would
3820	3820	be exempt from taxation under the provisions of this section if purchased
3821	3821	directly by TLC charities. Nothing in this subsection shall be deemed to
3822	3822	exempt the purchase of any construction machinery, equipment or tools
3823	3823	used in the constructing, maintaining, repairing, enlarging, furnishing or
3824	3824	remodeling such facilities for TLC charities. When TLC charities contracts
3825	3825	for the purpose of constructing, maintaining, repairing, enlarging,
3826	3826	furnishing or remodeling such facilities, it shall obtain from the state and
3827	3827	furnish to the contractor an exemption certificate for the project involved,
3828	3828	and the contractor may purchase materials for incorporation in such
3829	3829	project. The contractor shall furnish the number of such certificate to all
3830	3830	suppliers from whom such purchases are made, and such suppliers shall
3831	3831	execute invoices covering the same bearing the number of such certificate.
3832	3832	Upon completion of the project the contractor shall furnish to TLC
3833	3833	charities a sworn statement, on a form to be provided by the director of
3834	3834	1
3835	3835	2
3836	3836	3
3837	3837	4
3838	3838	5
3839	3839	6
3840	3840	7
3841	3841	8
3842	3842	9
3843	3843	10
3844	3844	11
3845	3845	12
3846	3846	13
3847	3847	14
3848	3848	15
3849	3849	16
3850	3850	17
3851	3851	18
3852	3852	19
3853	3853	20
3854	3854	21
3855	3855	22
3856	3856	23
3857	3857	24
3858	3858	25
3859	3859	26
3860	3860	27
3861	3861	28
3862	3862	29
3863	3863	30
3864	3864	31
3865	3865	32
3866	3866	33
3867	3867	34
3868	3868	35
3869	3869	36
3870	3870	37
3871	3871	38
3872	3872	39
3873	3873	40
3874	3874	41
3875	3875	42
3876	3876	43 HB 2744 46
3877	3877	taxation, that all purchases so made were entitled to exemption under this
3878	3878	subsection. All invoices shall be held by the contractor for a period of five
3879	3879	years and shall be subject to audit by the director of taxation. If any
3880	3880	materials purchased under such a certificate are found not to have been
3881	3881	incorporated in the building or other project or not to have been returned
3882	3882	for credit or the sales or compensating tax otherwise imposed upon such
3883	3883	materials that will not be incorporated into the building or other project
3884	3884	reported and paid by such contractor to the director of taxation not later
3885	3885	than the 20
3886	3886	th
3887	3887	day of the month following the close of the month in which it
3888	3888	shall be determined that such materials will not be used for the purpose for
3889	3889	which such certificate was issued, TLC charities shall be liable for tax on
3890	3890	all materials purchased for the project, and upon payment thereof it may
3891	3891	recover the same from the contractor together with reasonable attorney
3892	3892	fees. Any contractor or any agent, employee or subcontractor thereof, who
3893	3893	shall use or otherwise dispose of any materials purchased under such a
3894	3894	certificate for any purpose other than that for which such a certificate is
3895	3895	issued without the payment of the sales or compensating tax otherwise
3896	3896	imposed upon such materials, shall be guilty of a misdemeanor and, upon
3897	3897	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3898	3898	79-3615(h), and amendments thereto;
3899	3899	(zzz) all sales of tangible personal property purchased by the rotary
3900	3900	club of shawnee foundation, which is exempt from federal income taxation
3901	3901	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
3902	3902	as amended, used for the purpose of providing contributions to community
3903	3903	service organizations and scholarships;
3904	3904	(aaaa) all sales of personal property and services purchased by or on
3905	3905	behalf of victory in the valley, inc., which is exempt from federal income
3906	3906	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3907	3907	for the purpose of providing a cancer support group and services for
3908	3908	persons with cancer, and all sales of any such property by or on behalf of
3909	3909	any such organization for any such purpose;
3910	3910	(bbbb) all sales of entry or participation fees, charges or tickets by
3911	3911	Guadalupe health foundation, which is exempt from federal income
3912	3912	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3913	3913	for such organization's annual fundraising event which purpose is to
3914	3914	provide health care services for uninsured workers;
3915	3915	(cccc) all sales of tangible personal property or services purchased by
3916	3916	or on behalf of wayside waifs, inc., which is exempt from federal income
3917	3917	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3918	3918	for the purpose of providing such organization's annual fundraiser, an
3919	3919	event whose purpose is to support the care of homeless and abandoned
3920	3920	animals, animal adoption efforts, education programs for children and
3921	3921	efforts to reduce animal over-population and animal welfare services, and
3922	3922	1
3923	3923	2
3924	3924	3
3925	3925	4
3926	3926	5
3927	3927	6
3928	3928	7
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3947	3947	26
3948	3948	27
3949	3949	28
3950	3950	29
3951	3951	30
3952	3952	31
3953	3953	32
3954	3954	33
3955	3955	34
3956	3956	35
3957	3957	36
3958	3958	37
3959	3959	38
3960	3960	39
3961	3961	40
3962	3962	41
3963	3963	42
3964	3964	43 HB 2744 47
3965	3965	all sales of any such property, including entry or participation fees or
3966	3966	charges, by or on behalf of such organization for such purpose;
3967	3967	(dddd) all sales of tangible personal property or services purchased
3968	3968	by or on behalf of goodwill industries or Easter seals of Kansas, inc., both
3969	3969	of which are exempt from federal income taxation pursuant to section
3970	3970	501(c)(3) of the federal internal revenue code, for the purpose of providing
3971	3971	education, training and employment opportunities for people with
3972	3972	disabilities and other barriers to employment;
3973	3973	(eeee) all sales of tangible personal property or services purchased by
3974	3974	or on behalf of all American beef battalion, inc., which is exempt from
3975	3975	federal income taxation pursuant to section 501(c)(3) of the federal
3976	3976	internal revenue code, for the purpose of educating, promoting and
3977	3977	participating as a contact group through the beef cattle industry in order to
3978	3978	carry out such projects that provide support and morale to members of the
3979	3979	United States armed forces and military services;
3980	3980	(ffff) all sales of tangible personal property and services purchased by
3981	3981	sheltered living, inc., which is exempt from federal income taxation
3982	3982	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
3983	3983	and which such property and services are used for the purpose of
3984	3984	providing residential and day services for people with developmental
3985	3985	disabilities or intellectual disability, or both, and all sales of any such
3986	3986	property by or on behalf of sheltered living, inc., for any such purpose; and
3987	3987	all sales of tangible personal property or services purchased by a
3988	3988	contractor for the purpose of rehabilitating, constructing, maintaining,
3989	3989	repairing, enlarging, furnishing or remodeling homes and facilities for
3990	3990	sheltered living, inc., for any such purpose that would be exempt from
3991	3991	taxation under the provisions of this section if purchased directly by
3992	3992	sheltered living, inc. Nothing in this subsection shall be deemed to exempt
3993	3993	the purchase of any construction machinery, equipment or tools used in the
3994	3994	constructing, maintaining, repairing, enlarging, furnishing or remodeling
3995	3995	such homes and facilities for sheltered living, inc. When sheltered living,
3996	3996	inc., contracts for the purpose of rehabilitating, constructing, maintaining,
3997	3997	repairing, enlarging, furnishing or remodeling such homes and facilities, it
3998	3998	shall obtain from the state and furnish to the contractor an exemption
3999	3999	certificate for the project involved, and the contractor may purchase
4000	4000	materials for incorporation in such project. The contractor shall furnish the
4001	4001	number of such certificate to all suppliers from whom such purchases are
4002	4002	made, and such suppliers shall execute invoices covering the same bearing
4003	4003	the number of such certificate. Upon completion of the project the
4004	4004	contractor shall furnish to sheltered living, inc., a sworn statement, on a
4005	4005	form to be provided by the director of taxation, that all purchases so made
4006	4006	were entitled to exemption under this subsection. All invoices shall be held
4007	4007	by the contractor for a period of five years and shall be subject to audit by
4008	4008	1
4009	4009	2
4010	4010	3
4011	4011	4
4012	4012	5
4013	4013	6
4014	4014	7
4015	4015	8
4016	4016	9
4017	4017	10
4018	4018	11
4019	4019	12
4020	4020	13
4021	4021	14
4022	4022	15
4023	4023	16
4024	4024	17
4025	4025	18
4026	4026	19
4027	4027	20
4028	4028	21
4029	4029	22
4030	4030	23
4031	4031	24
4032	4032	25
4033	4033	26
4034	4034	27
4035	4035	28
4036	4036	29
4037	4037	30
4038	4038	31
4039	4039	32
4040	4040	33
4041	4041	34
4042	4042	35
4043	4043	36
4044	4044	37
4045	4045	38
4046	4046	39
4047	4047	40
4048	4048	41
4049	4049	42
4050	4050	43 HB 2744 48
4051	4051	the director of taxation. If any materials purchased under such a certificate
4052	4052	are found not to have been incorporated in the building or other project or
4053	4053	not to have been returned for credit or the sales or compensating tax
4054	4054	otherwise imposed upon such materials that will not be so incorporated in
4055	4055	the building or other project reported and paid by such contractor to the
4056	4056	director of taxation not later than the 20
4057	4057	th
4058	4058	day of the month following the
4059	4059	close of the month in which it shall be determined that such materials will
4060	4060	not be used for the purpose for which such certificate was issued, sheltered
4061	4061	living, inc., shall be liable for tax on all materials purchased for the
4062	4062	project, and upon payment thereof it may recover the same from the
4063	4063	contractor together with reasonable attorney fees. Any contractor or any
4064	4064	agent, employee or subcontractor thereof, who shall use or otherwise
4065	4065	dispose of any materials purchased under such a certificate for any purpose
4066	4066	other than that for which such a certificate is issued without the payment
4067	4067	of the sales or compensating tax otherwise imposed upon such materials,
4068	4068	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4069	4069	subject to the penalties provided for in K.S.A. 79-3615(h), and
4070	4070	amendments thereto;
4071	4071	(gggg) all sales of game birds for which the primary purpose is use in
4072	4072	hunting;
4073	4073	(hhhh) all sales of tangible personal property or services purchased
4074	4074	on or after July 1, 2014, for the purpose of and in conjunction with
4075	4075	constructing, reconstructing, enlarging or remodeling a business identified
4076	4076	under the North American industry classification system (NAICS)
4077	4077	subsectors 1123, 1124, 112112, 112120 or 112210, and the sale and
4078	4078	installation of machinery and equipment purchased for installation at any
4079	4079	such business. The exemption provided in this subsection shall not apply
4080	4080	to projects that have actual total costs less than $50,000. When a person
4081	4081	contracts for the construction, reconstruction, enlargement or remodeling
4082	4082	of any such business, such person shall obtain from the state and furnish to
4083	4083	the contractor an exemption certificate for the project involved, and the
4084	4084	contractor may purchase materials, machinery and equipment for
4085	4085	incorporation in such project. The contractor shall furnish the number of
4086	4086	such certificates to all suppliers from whom such purchases are made, and
4087	4087	such suppliers shall execute invoices covering the same bearing the
4088	4088	number of such certificate. Upon completion of the project, the contractor
4089	4089	shall furnish to the owner of the business a sworn statement, on a form to
4090	4090	be provided by the director of taxation, that all purchases so made were
4091	4091	entitled to exemption under this subsection. All invoices shall be held by
4092	4092	the contractor for a period of five years and shall be subject to audit by the
4093	4093	director of taxation. Any contractor or any agent, employee or
4094	4094	subcontractor of the contractor, who shall use or otherwise dispose of any
4095	4095	materials, machinery or equipment purchased under such a certificate for
4096	4096	1
4097	4097	2
4098	4098	3
4099	4099	4
4100	4100	5
4101	4101	6
4102	4102	7
4103	4103	8
4104	4104	9
4105	4105	10
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4107	4107	12
4108	4108	13
4109	4109	14
4110	4110	15
4111	4111	16
4112	4112	17
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4117	4117	22
4118	4118	23
4119	4119	24
4120	4120	25
4121	4121	26
4122	4122	27
4123	4123	28
4124	4124	29
4125	4125	30
4126	4126	31
4127	4127	32
4128	4128	33
4129	4129	34
4130	4130	35
4131	4131	36
4132	4132	37
4133	4133	38
4134	4134	39
4135	4135	40
4136	4136	41
4137	4137	42
4138	4138	43 HB 2744 49
4139	4139	any purpose other than that for which such a certificate is issued without
4140	4140	the payment of the sales or compensating tax otherwise imposed thereon,
4141	4141	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4142	4142	subject to the penalties provided for in K.S.A. 79-3615(h), and
4143	4143	amendments thereto;
4144	4144	(iiii) all sales of tangible personal property or services purchased by a
4145	4145	contractor for the purpose of constructing, maintaining, repairing,
4146	4146	enlarging, furnishing or remodeling facilities for the operation of services
4147	4147	for Wichita children's home for any such purpose that would be exempt
4148	4148	from taxation under the provisions of this section if purchased directly by
4149	4149	Wichita children's home. Nothing in this subsection shall be deemed to
4150	4150	exempt the purchase of any construction machinery, equipment or tools
4151	4151	used in the constructing, maintaining, repairing, enlarging, furnishing or
4152	4152	remodeling such facilities for Wichita children's home. When Wichita
4153	4153	children's home contracts for the purpose of constructing, maintaining,
4154	4154	repairing, enlarging, furnishing or remodeling such facilities, it shall obtain
4155	4155	from the state and furnish to the contractor an exemption certificate for the
4156	4156	project involved, and the contractor may purchase materials for
4157	4157	incorporation in such project. The contractor shall furnish the number of
4158	4158	such certificate to all suppliers from whom such purchases are made, and
4159	4159	such suppliers shall execute invoices covering the same bearing the
4160	4160	number of such certificate. Upon completion of the project, the contractor
4161	4161	shall furnish to Wichita children's home a sworn statement, on a form to be
4162	4162	provided by the director of taxation, that all purchases so made were
4163	4163	entitled to exemption under this subsection. All invoices shall be held by
4164	4164	the contractor for a period of five years and shall be subject to audit by the
4165	4165	director of taxation. If any materials purchased under such a certificate are
4166	4166	found not to have been incorporated in the building or other project or not
4167	4167	to have been returned for credit or the sales or compensating tax otherwise
4168	4168	imposed upon such materials that will not be so incorporated in the
4169	4169	building or other project reported and paid by such contractor to the
4170	4170	director of taxation not later than the 20
4171	4171	th
4172	4172	day of the month following the
4173	4173	close of the month in which it shall be determined that such materials will
4174	4174	not be used for the purpose for which such certificate was issued, Wichita
4175	4175	children's home shall be liable for the tax on all materials purchased for the
4176	4176	project, and upon payment, it may recover the same from the contractor
4177	4177	together with reasonable attorney fees. Any contractor or any agent,
4178	4178	employee or subcontractor, who shall use or otherwise dispose of any
4179	4179	materials purchased under such a certificate for any purpose other than that
4180	4180	for which such a certificate is issued without the payment of the sales or
4181	4181	compensating tax otherwise imposed upon such materials, shall be guilty
4182	4182	of a misdemeanor and, upon conviction, shall be subject to the penalties
4183	4183	provided for in K.S.A. 79-3615(h), and amendments thereto;
4184	4184	1
4185	4185	2
4186	4186	3
4187	4187	4
4188	4188	5
4189	4189	6
4190	4190	7
4191	4191	8
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4202	4202	19
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4208	4208	25
4209	4209	26
4210	4210	27
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4212	4212	29
4213	4213	30
4214	4214	31
4215	4215	32
4216	4216	33
4217	4217	34
4218	4218	35
4219	4219	36
4220	4220	37
4221	4221	38
4222	4222	39
4223	4223	40
4224	4224	41
4225	4225	42
4226	4226	43 HB 2744 50
4227	4227	(jjjj) all sales of tangible personal property or services purchased by
4228	4228	or on behalf of the beacon, inc., that is exempt from federal income
4229	4229	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
4230	4230	for the purpose of providing those desiring help with food, shelter, clothing
4231	4231	and other necessities of life during times of special need;
4232	4232	(kkkk) all sales of tangible personal property and services purchased
4233	4233	by or on behalf of reaching out from within, inc., which is exempt from
4234	4234	federal income taxation pursuant to section 501(c)(3) of the federal
4235	4235	internal revenue code, for the purpose of sponsoring self-help programs for
4236	4236	incarcerated persons that will enable such incarcerated persons to become
4237	4237	role models for non-violence while in correctional facilities and productive
4238	4238	family members and citizens upon return to the community;
4239	4239	(llll) all sales of tangible personal property and services purchased by
4240	4240	Gove county healthcare endowment foundation, inc., which is exempt
4241	4241	from federal income taxation pursuant to section 501(c)(3) of the federal
4242	4242	internal revenue code of 1986, and which such property and services are
4243	4243	used for the purpose of constructing and equipping an airport in Quinter,
4244	4244	Kansas, and all sales of tangible personal property or services purchased
4245	4245	by a contractor for the purpose of constructing and equipping an airport in
4246	4246	Quinter, Kansas, for such organization, that would be exempt from
4247	4247	taxation under the provisions of this section if purchased directly by such
4248	4248	organization. Nothing in this subsection shall be deemed to exempt the
4249	4249	purchase of any construction machinery, equipment or tools used in the
4250	4250	constructing or equipping of facilities for such organization. When such
4251	4251	organization shall contract for the purpose of constructing or equipping an
4252	4252	airport in Quinter, Kansas, it shall obtain from the state and furnish to the
4253	4253	contractor an exemption certificate for the project involved, and the
4254	4254	contractor may purchase materials for incorporation in such project. The
4255	4255	contractor shall furnish the number of such certificate to all suppliers from
4256	4256	whom such purchases are made, and such suppliers shall execute invoices
4257	4257	covering the same bearing the number of such certificate. Upon
4258	4258	completion of the project, the contractor shall furnish to such organization
4259	4259	concerned a sworn statement, on a form to be provided by the director of
4260	4260	taxation, that all purchases so made were entitled to exemption under this
4261	4261	subsection. All invoices shall be held by the contractor for a period of five
4262	4262	years and shall be subject to audit by the director of taxation. If any
4263	4263	materials purchased under such a certificate are found not to have been
4264	4264	incorporated in such facilities or not to have been returned for credit or the
4265	4265	sales or compensating tax otherwise imposed upon such materials that will
4266	4266	not be so incorporated in such facilities reported and paid by such
4267	4267	contractor to the director of taxation no later than the 20
4268	4268	th
4269	4269	day of the month
4270	4270	following the close of the month in which it shall be determined that such
4271	4271	materials will not be used for the purpose for which such certificate was
4272	4272	1
4273	4273	2
4274	4274	3
4275	4275	4
4276	4276	5
4277	4277	6
4278	4278	7
4279	4279	8
4280	4280	9
4281	4281	10
4282	4282	11
4283	4283	12
4284	4284	13
4285	4285	14
4286	4286	15
4287	4287	16
4288	4288	17
4289	4289	18
4290	4290	19
4291	4291	20
4292	4292	21
4293	4293	22
4294	4294	23
4295	4295	24
4296	4296	25
4297	4297	26
4298	4298	27
4299	4299	28
4300	4300	29
4301	4301	30
4302	4302	31
4303	4303	32
4304	4304	33
4305	4305	34
4306	4306	35
4307	4307	36
4308	4308	37
4309	4309	38
4310	4310	39
4311	4311	40
4312	4312	41
4313	4313	42
4314	4314	43 HB 2744 51
4315	4315	issued, such organization concerned shall be liable for tax on all materials
4316	4316	purchased for the project, and upon payment thereof it may recover the
4317	4317	same from the contractor together with reasonable attorney fees. Any
4318	4318	contractor or any agent, employee or subcontractor thereof, who purchased
4319	4319	under such a certificate for any purpose other than that for which such a
4320	4320	certificate is issued without the payment of the sales or compensating tax
4321	4321	otherwise imposed upon such materials, shall be guilty of a misdemeanor
4322	4322	and, upon conviction therefor, shall be subject to the penalties provided for
4323	4323	in K.S.A. 79-3615(h), and amendments thereto. The provisions of this
4324	4324	subsection shall expire and have no effect on and after July 1, 2019;
4325	4325	(mmmm) all sales of gold or silver coins; and palladium, platinum,
4326	4326	gold or silver bullion. For the purposes of this subsection, "bullion" means
4327	4327	bars, ingots or commemorative medallions of gold, silver, platinum,
4328	4328	palladium, or a combination thereof, for which the value of the metal
4329	4329	depends on its content and not the form;
4330	4330	(nnnn) all sales of tangible personal property or services purchased
4331	4331	by friends of hospice of Jefferson county, an organization that is exempt
4332	4332	from federal income taxation pursuant to section 501(c)(3) of the federal
4333	4333	internal revenue code of 1986, for the purpose of providing support to the
4334	4334	Jefferson county hospice agency in end-of-life care of Jefferson county
4335	4335	families, friends and neighbors, and all sales of entry or participation fees,
4336	4336	charges or tickets by friends of hospice of Jefferson county for such
4337	4337	organization's fundraising event for such purpose;
4338	4338	(oooo) all sales of tangible personal property or services purchased
4339	4339	for the purpose of and in conjunction with constructing, reconstructing,
4340	4340	enlarging or remodeling a qualified business facility by a qualified firm or
4341	4341	qualified supplier that meets the requirements established in K.S.A. 2023
4342	4342	Supp. 74-50,312 and, 74-50,319, section 2 and section 7, and amendments
4343	4343	thereto, and that has been approved for a project exemption certificate by
4344	4344	the secretary of commerce, and the sale and installation of machinery and
4345	4345	equipment purchased by such qualified firm or, qualified supplier or
4346	4346	qualified company for installation at any such qualified business facility.
4347	4347	When a person shall contract for the construction, reconstruction,
4348	4348	enlargement or remodeling of any such qualified business facility, such
4349	4349	person shall obtain from the state and furnish to the contractor an
4350	4350	exemption certificate for the project involved, and the contractor may
4351	4351	purchase materials, machinery and equipment for incorporation in such
4352	4352	project. The contractor shall furnish the number of such certificates to all
4353	4353	suppliers from whom such purchases are made, and such suppliers shall
4354	4354	execute invoices covering the same bearing the number of such certificate.
4355	4355	Upon completion of the project, the contractor shall furnish to the owner
4356	4356	of the qualified firm or, qualified supplier or qualified company a sworn
4357	4357	statement, on a form to be provided by the director of taxation, that all
4358	4358	1
4359	4359	2
4360	4360	3
4361	4361	4
4362	4362	5
4363	4363	6
4364	4364	7
4365	4365	8
4366	4366	9
4367	4367	10
4368	4368	11
4369	4369	12
4370	4370	13
4371	4371	14
4372	4372	15
4373	4373	16
4374	4374	17
4375	4375	18
4376	4376	19
4377	4377	20
4378	4378	21
4379	4379	22
4380	4380	23
4381	4381	24
4382	4382	25
4383	4383	26
4384	4384	27
4385	4385	28
4386	4386	29
4387	4387	30
4388	4388	31
4389	4389	32
4390	4390	33
4391	4391	34
4392	4392	35
4393	4393	36
4394	4394	37
4395	4395	38
4396	4396	39
4397	4397	40
4398	4398	41
4399	4399	42
4400	4400	43 HB 2744 52
4401	4401	purchases so made were entitled to exemption under this subsection. All
4402	4402	invoices shall be held by the contractor for a period of five years and shall
4403	4403	be subject to audit by the director of taxation. Any contractor or any agent,
4404	4404	employee or subcontractor thereof who shall use or otherwise dispose of
4405	4405	any materials, machinery or equipment purchased under such a certificate
4406	4406	for any purpose other than that for which such a certificate is issued
4407	4407	without the payment of the sales or compensating tax otherwise imposed
4408	4408	thereon, shall be guilty of a misdemeanor and, upon conviction therefor,
4409	4409	shall be subject to the penalties provided for in K.S.A. 79-3615(h), and
4410	4410	amendments thereto. As used in this subsection, "qualified business
4411	4411	facility," "qualified firm" and "qualified supplier" mean the same as
4412	4412	defined in K.S.A. 2023 Supp. 74-50,311, and amendments thereto, and
4413	4413	"qualified company" means the same as defined in section 1, and
4414	4414	amendments thereto;
4415	4415	(pppp) (1) all sales of tangible personal property or services
4416	4416	purchased by a not-for-profit corporation that is designated as an area
4417	4417	agency on aging by the secretary for aging and disabilities services and is
4418	4418	exempt from federal income taxation pursuant to section 501(c)(3) of the
4419	4419	federal internal revenue code for the purpose of coordinating and
4420	4420	providing seniors and those living with disabilities with services that
4421	4421	promote person-centered care, including home-delivered meals,
4422	4422	congregate meal settings, long-term case management, transportation,
4423	4423	information, assistance and other preventative and intervention services to
4424	4424	help service recipients remain in their homes and communities or for the
4425	4425	purpose of constructing, equipping, reconstructing, maintaining, repairing,
4426	4426	enlarging, furnishing or remodeling facilities for such area agency on
4427	4427	aging; and
4428	4428	(2) all sales of tangible personal property or services purchased by a
4429	4429	contractor for the purpose of constructing, equipping, reconstructing,
4430	4430	maintaining, repairing, enlarging, furnishing or remodeling facilities for an
4431	4431	area agency on aging that would be exempt from taxation under the
4432	4432	provisions of this section if purchased directly by such area agency on
4433	4433	aging. Nothing in this paragraph shall be deemed to exempt the purchase
4434	4434	of any construction machinery, equipment or tools used in the
4435	4435	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
4436	4436	furnishing or remodeling facilities for an area agency on aging. When an
4437	4437	area agency on aging contracts for the purpose of constructing, equipping,
4438	4438	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
4439	4439	facilities, it shall obtain from the state and furnish to the contractor an
4440	4440	exemption certificate for the project involved, and such contractor may
4441	4441	purchase materials for incorporation in such project. The contractor shall
4442	4442	furnish the number of such certificate to all suppliers from whom such
4443	4443	purchases are made, and such suppliers shall execute invoices covering the
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4486	4486	43 HB 2744 53
4487	4487	same bearing the number of such certificate. Upon completion of the
4488	4488	project, the contractor shall furnish to such area agency on aging a sworn
4489	4489	statement, on a form to be provided by the director of taxation, that all
4490	4490	purchases so made were entitled to exemption under this subsection. All
4491	4491	invoices shall be held by the contractor for a period of five years and shall
4492	4492	be subject to audit by the director of taxation. If any materials purchased
4493	4493	under such a certificate are found not to have been incorporated in the
4494	4494	building or other project or not to have been returned for credit or the sales
4495	4495	or compensating tax otherwise imposed upon such materials that will not
4496	4496	be so incorporated in the building or other project reported and paid by
4497	4497	such contractor to the director of taxation not later than the 20
4498	4498	th
4499	4499	day of the
4500	4500	month following the close of the month in which it shall be determined
4501	4501	that such materials will not be used for the purpose for which such
4502	4502	certificate was issued, the area agency on aging concerned shall be liable
4503	4503	for tax on all materials purchased for the project, and upon payment
4504	4504	thereof, the area agency on aging may recover the same from the
4505	4505	contractor together with reasonable attorney fees. Any contractor or any
4506	4506	agent, employee or subcontractor thereof who shall use or otherwise
4507	4507	dispose of any materials purchased under such a certificate for any purpose
4508	4508	other than that for which such a certificate is issued without the payment
4509	4509	of the sales or compensating tax otherwise imposed upon such materials
4510	4510	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4511	4511	subject to the penalties provided for in K.S.A. 79-3615(h), and
4512	4512	amendments thereto; and
4513	4513	(qqqq) all sales of tangible personal property or services purchased
4514	4514	by Kansas suicide prevention HQ, inc., an organization that is exempt
4515	4515	from federal income taxation pursuant to section 501(c)(3) of the federal
4516	4516	internal revenue code of 1986, for the purpose of bringing suicide
4517	4517	prevention training and awareness to communities across the state.
4518	4518	Sec. 10. K.S.A. 2023 Supp. 79-3606 is hereby repealed.
4519	4519	Sec. 11. This act shall take effect and be in force from and after its
4520	4520	publication in the statute book.
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