Session of 2024
HOUSE BILL No. 2744
By Committee on Commerce, Labor and Economic Development
Requested by Rachel Willis on behalf of the Department of Commerce
2-7
AN ACT concerning economic development; enacting the transformation
of passenger and freight vehicle industry act; relating to tax and other
incentives for projects in specified industries or for a national corporate
headquarters with specified job requirements of at least 250 new
employees and specified capital investment requirements; providing for
a refundable income, privilege and premium tax credit for a portion of
any specified capital investment requirement; retention of certain
payroll withholding taxes; sales tax exemption for project construction;
establishing the transformation of passenger and freight vehicle
industry act new employee training and education fund; amending
K.S.A. 2023 Supp. 79-3606 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) This act shall be known and may be cited as the
transformation of passenger and freight vehicle industry act.
(b) For purposes of the transformation of passenger and freight
vehicle industry act:
(1) "Act" means the transformation of passenger and freight vehicle
industry act, sections 1 through 8, and amendments thereto.
(2) "Applicant" means a legal entity seeking to certify as a qualified
firm for the economic development benefits pursuant to this act.
(3) "Commence investment" means to begin to invest, with action
being directly connected to documentation describing the project
previously submitted to the department.
(4) "Commencement of commercial operations" means the date, as
determined by the secretary, that the qualified business facility is first
available for use by the qualified company or first capable of being used
by the qualified company in the revenue-producing enterprise in which the
qualified company intends to use the qualified business facility.
(5) "Commitment to invest" means one or both of the following:
(A) The qualified company relocates assets that it already owns to
Kansas from an out-of-state location; or
(B) the qualified company enters into a written agreement with a third
party to acquire assets that provides either party with legally enforceable
remedies if the agreement is breached.
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(6) "Construction" means construction, reconstruction, enlarging or
remodeling for the purpose of building or establishing a qualified business
facility.
(7) "County median wage" means the median wage in the county
where the qualified company intends to employ new employees as
reported by the department of labor in its annual Kansas wage survey for
the previous year.
(8) "Department" means the department of commerce.
(9) "Electric motor vehicle" means a passenger or freight motor
vehicle primarily powered by an electric motor that draws current from
rechargeable storage batteries, fuel cells, photovoltaic arrays or other
sources of electric current and may include an electric-hybrid vehicle.
(10) "Facility" means:
(A) Any factory, mill, plant, refinery, warehouse, headquarters or
other building or buildings in proximity to each other. For purposes of this
subsection "building" means a structure within which individuals are
customarily employed or that is customarily used to house machinery,
equipment or other property;
(B) the land on which such building or buildings is located; and
(C) machinery, equipment and other real or tangible personal property
located at such land or within such building or buildings and used in
connection with the operation conducted at such land or within such
building or buildings.
(11) "Headquarters" means a qualified business facility that meets the
following conditions:
(A) The main activity at the qualified business facility is providing
direction, management or administrative support for the operation of
multiple company-owned worksites or facilities that are engaged in
qualified activities and in which the applicant has an ownership interest
greater than 50%; and
(B) the function of the qualified business facility is not dependent on
its geographical location.
(12) "Hydrogen-powered vehicle" means a passenger or freight motor
vehicle that uses hydrogen as a significant source of motive power, either
through a fuel cell or internal combustion.
(13) "Metropolitan county" means the county of Douglas, Johnson,
Leavenworth, Sedgwick, Shawnee or Wyandotte.
(14) "New employee" means a qualified business facility employee
who is newly employed in Kansas by the qualified company in the
qualified company's business operating in Kansas during the taxable year
for which benefits are sought. Qualified business facility employees
performing functions directly related to a relocating, expanding or new
business facility, office, department or other operation shall be considered
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"new employees."
(15) "On-the-job training" means training situations during which a
product or service that can be sold or used in internal operations is
generated.
(16) "Qualified activities" means engaging in industries that include,
but are not limited to, the following:
(A) Any industry in the following NAICS code groups, sectors or
subsectors:
(i) Subsector 336; or
(ii) industry group 335910; or
(B) research and development operations.
(17) (A) "Qualified business facility" means a facility that is located
within Kansas and is for use by a qualified company in the operation of a
revenue-producing enterprise.
(B) A facility shall not be considered a "qualified business facility" in
the hands of the qualified company if:
(i) The qualified company's only activity with respect to the facility is
to lease the facility to another individual or business or the qualified
company does not otherwise use the facility in the operation of a revenue-
producing enterprise. If the qualified company employs only a portion of
the facility in the operation of a revenue-producing enterprise that portion
may constitute a "qualified business facility" if all other requirements with
respect to such portion are met; or
(ii) the facility was acquired or leased by the qualified company from
another individual or business and the facility was used, either
immediately prior to the transfer of title to the qualified company or to the
commencement of the term of the lease to the qualified company, by any
other individual or business in the operation of a revenue-producing
enterprise that is the same or substantially the same, as determined by the
secretary, as the revenue-producing enterprise pursued by the qualified
company at the facility.
(18) (A) "Qualified business facility employee" means an individual
employed by the qualified company at a qualified business facility project
site, employed full time and scheduled to work for an average minimum of
30 hours per week and employed for at least three consecutive months on
the last day of the period covered by a department of labor quarterly wage
report and unemployment tax return.
(B) "Qualified business facility employee" does not include an
employee at a qualified business facility project site who has not been
employed for three consecutive months.
(19) "Qualified business facility investment" or "qualified
investment" means the value of the real and tangible personal property,
except inventory or property held for sale to customers in the ordinary
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course of the qualified company's business, that constitutes the qualified
business facility or that is used by the qualified company in the operation
of the qualified business facility, including such property used for
administrative or managerial functions, during the taxable years for which
the credit allowed by sections 2 and 3, and amendments thereto, is
claimed. "Qualified business facility investment" does not include any
building, land or other real or tangible personal property that is granted,
leased or transferred to the qualified company without cost to the qualified
company. For purposes of calculating the qualified business facility
investment, real or tangible personal property that is granted, leased or
transferred to the qualified company at a cost of less than fair market value
shall be reduced in value, by the difference in cost to the qualified
company and fair market value. The value of such property during such
taxable year shall be:
(A) Such property's original cost if owned by the qualified company;
or
(B) eight times the net annual rental rate if leased by the qualified
company. The net annual rental rate shall be the annual rental rate paid by
the qualified company less any annual rental rate received by the qualified
company from subrentals. The "qualified business facility investment"
shall be determined by dividing by 12 the sum of the total value of such
property on the last business day of each calendar month of the taxable
year. Notwithstanding the provisions of this paragraph, for the purpose of
computing the credit allowed by section 3, and amendments thereto, in the
case of a "qualified business facility investment" in a qualified business
facility that existed and was operated by the qualified company or a related
taxpayer prior to the investment, the amount of the qualified company's
investment shall be computed as follows: Such investment amount shall be
reduced by the average amount, computed as provided in this paragraph,
of the investment of the qualified company or a related taxpayer in the
facility for the taxable year preceding the taxable year in which the
"qualified business facility investment" was made in the facility.
(20) "Qualified company" means a for-profit business establishment,
subject to Kansas income, sales or property taxes, that is:
(A) Engaged in one or more of the following qualified activities, as
defined by the secretary of commerce:
(i) Electric or hydrogen-powered motor vehicle manufacturing;
(ii) battery manufacturing;
(iii) research and development operation; or
(iv) headquarters for any of the industries described in clauses (i)
through (iii);
(B) engaged in any industry or revenue-producing activity if seeking
benefits with respect to a qualified business facility that is the national
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corporate headquarters of the for-profit business establishment;
(C) a supplier of components, sub-assemblies, chemicals or other
process-related tangible goods, is located in Kansas and is owned by:
(i) An individual, any partnership, association, limited liability
corporation or corporation domiciled in Kansas; or
(ii) any business, including any business owned by an individual, any
partnership, association, limited liability corporation or corporation, even
if the business is a wholly owned subsidiary of a foreign corporation, that
operates in the state of Kansas for the purpose of supplying a qualified
company engaged in qualified activities as described in subparagraph (A);
and
(D) eligible for benefits under this act as determined by the secretary.
(21) "Research and development operation" means an operation that
is conducted solely to advance scientific and technical knowledge in any
qualified activity, as described in paragraph (19)(A).
(22) "Revenue-producing enterprise" means an enterprise that creates
revenue subject to tax liability in this state.
(23) "Residency in Kansas" means:
(A) Owning, renting or leasing real estate in Kansas with the intent to
make the real estate or any other real estate in Kansas an employee's
primary home; and
(B) engaging in a trade, business or profession within Kansas.
(24) "Secretary" means the secretary of commerce.
(25) (A) "Total payroll cost" means the payroll amount defined by the
department of labor as total wages on the quarterly wage report and
unemployment tax return. For a qualified business facility, "total payroll
cost" during the appropriate measurement period may be combined with
any pretax earnings in which an employee has elected to direct to a:
(i) Flexible-spending plan;
(ii) deferred compensation plan; or
(iii) retirement plan that includes earnings that the employee would
otherwise have received in the form of taxable wages had it not been for
the voluntary deferral.
(B) "Total payroll cost" does not include company-paid costs for
health insurance, dental insurance and any other employee benefits that are
not reported to the Kansas department of labor on the employer's quarterly
wage report and unemployment tax return.
(26) (A) "Training and education eligible expense" means the amount
actually paid for training and education of the group of employees, or
portion thereof, at any Kansas community college or technical college and
from which the qualified company expects to derive increased productivity
or quality.
(B) "Training and education eligible expense" includes instructor
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salaries, curriculum planning and development, materials and supplies,
textbooks, manuals, minor training equipment, certain training facility
costs and any other expenditure that is eligible under the Kansas industrial
training or the Kansas industrial retraining programs.
(C) "Training and education eligible expense" may include, subject to
maximum limits determined by the secretary:
(i) Wages of employees during eligible training; and
(ii) salaries of employee instructors.
(D) "Training and education eligible expense" does not include:
(i) Compensation paid to an employee trainee who is receiving on-
the-job training;
(ii) compensation paid to an employee during self-training, except for
time in which the employee is involved in activities related to an approved
computerized course of study;
(iii) bonus pay received as compensation related to the company's
financial performance or the employee's job performance, or both;
(iv) overtime pay, unless the employee is being paid at an overtime
rate while participating in eligible training;
(v) operations manuals and reference manuals, except that training-
specific manuals may be allowable;
(vi) training and education costs covered by moneys or grants
obtained from state, federal or other government-sponsored workforce
training programs; and
(vii) training and education costs that were paid to a non-Kansas
college or technical college or any other entity that is not a Kansas college
or technical college.
New Sec. 2. (a) There is hereby established the transformation of
passenger and freight vehicle industry program to be administered by the
secretary of commerce. The purpose of the transformation of passenger
and freight vehicle industry program is to attract businesses engaged in
electric motor vehicle and hydrogen-powered vehicle production industries
to build new business facilities and operations, research and development
operations or new national headquarters in Kansas and to encourage the
development of a Kansas-based supply chain for such enterprises.
(b) A qualified company or qualified companies that jointly meet the
requirements of this act may be eligible for the following incentives as
approved by the secretary:
(1) The investment tax credit pursuant to section 3, and amendments
thereto;
(2) retention of a percentage of total payroll tax pursuant to section 4,
and amendments thereto;
(3) reimbursement of a percentage of eligible employee training and
education expenses pursuant to sections 5 and 6, and amendments thereto;
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and
(4) a sales tax exemption for construction costs of a qualified
business facility pursuant to K.S.A. 79-3606, and amendments thereto, and
section 7, and amendments thereto.
(c) (1) To be eligible to receive an incentive listed in subsection (b), a
qualified company, or jointly in the case of two or more qualified
companies, shall meet the requirements of this act, including any
requirements or provisions specific to each such incentive, and any rules
and regulations of the secretary pursuant to this act and shall submit an
application to the secretary in the form and manner as required by the
secretary and that describes the proposed project and how the project
meets the purposes of this act. Two or more qualified companies may
jointly submit an application to meet the requirements of the act.
(d) If the application is approved by the secretary, the qualified
company or companies shall enter into a binding agreement with the
secretary that shall include the following terms and conditions to receive
and retain the benefits allowed under this act and such other terms and
conditions as the secretary may require. The qualified company or
companies shall agree to:
(1) Complete the project described in the application within five years
of the date as specified in the agreement with the secretary;
(2) hire a minimum of 250 new employees within five years from the
date specified in the agreement with the secretary;
(3) retain such new employees as specified in the agreement for a
period determined by the secretary;
(4) in the case of a qualified company that submits an application to
construct a qualified business facility for an electric or hydrogen motor
vehicle assembly operation project, make a qualified business facility
investment of at least $250,000,000 to be completed within five years of
such date as specified in the agreement with the secretary and commence
commercial operations within five years of either the commitment to
invest or a date specified in the agreement. This capital investment
requirement shall not apply to other eligible applicants; and
(5) commit to repayment of any benefit or benefits received,
connected to or associated with a term or a condition of the agreement that
has been breached as determined by the secretary and the forfeiture of any
such earned benefits and the suspension or cessation of such future
benefits for as long as the breach is not corrected.
(e) If requested by the secretary, prior to making a commitment to
invest in a qualified business facility, the qualified company or companies
shall submit a certificate of intent to invest in the qualified business
facility to the secretary in the form and manner required by the secretary,
including, if required, a date when investment will commence.
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(f) The secretary shall not enter into an agreement for benefits
pursuant to this act with any qualified company after December 31, 2026.
(g) (1) The secretary shall conduct an annual review of the activities
undertaken by a qualified company or qualified companies to ensure that
the qualified company or qualified companies:
(A) Remain in good standing with the state;
(B) remain in compliance with the provisions of this act, any
applicable rules and regulations adopted by the secretary and any
agreement entered into with the secretary pursuant to this act; and
(C) continue to meet the requirements for the benefits provided under
this act.
(2) The secretary of commerce shall certify annually to the secretary
of revenue that the qualified company or qualified companies meet the
criteria for designation as a qualified company or qualified companies and
are eligible for benefits. The qualified company or qualified companies
shall provide the information requested by the secretary reasonably
necessary to determine the qualified company or qualified companies meet
such criteria and are eligible for benefits. Such information shall be
confidential to the same extent as information provided to the secretary to
determine eligibility pursuant to K.S.A.74-50,131, and amendments
thereto.
(3) Confidential financial information, any trade secret or other
information that, if known, would place the qualified company or qualified
companies at a disadvantage in the marketplace or would significantly
interfere with the purposes of this act in the judgment of the secretary that
is obtained by the secretary under this section shall not be subject to
disclosure pursuant to K.S.A. 45-215 et seq., and amendments thereto, but
shall be made available to the division of legislative post audit upon
request. The provisions of this paragraph shall be construed as additional
to and not as a limitation on or replacement of any other provision of the
Kansas open records act or other law providing for confidentiality of such
information. The provisions of this paragraph shall expire on July 1, 2029,
unless the legislature reviews and reenacts such provisions pursuant to
K.S.A. 45-229, and amendments thereto.
(h) (1) The books and records concerning investments made, sales,
employment and wages of any employees for which the qualified company
or qualified companies or third party has retained any Kansas payroll
withholding taxes or any other financial, employee or other records that
pertain to eligibility for benefits or compliance with the requirements of
this act shall be made available by the qualified company or qualified
companies for inspection by the secretary or the secretary's duly
authorized agents or employees.
(2) (A) Any inspection conducted pursuant to paragraph (1) shall be
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started and completed within business hours.
(B) The secretary shall provide written notice to the qualified
company or qualified companies or third party of any such upcoming
inspection 10 calendar days before such inspection is conducted.
(3) Upon request by the secretary, the department of revenue shall
audit the qualified company or qualified companies, or a third party if
applicable, for compliance with the provisions of this act. The qualified
company or qualified companies shall cooperate with such audit.
(i) The secretary of revenue, in consultation with the secretary of
commerce, shall develop a form that shall be completed annually by any
qualified company that received any tax benefit pursuant to this section
and section 3 or 4, and amendments thereto. Such form shall require, at a
minimum, the information required by K.S.A. 79-32,243(a)(1) through (a)
(6), and amendments thereto, and any other information reasonably
required by the secretary of revenue or the secretary of commerce to
ensure compliance with the provisions of this act, applicable rules and
regulations, any agreement with the secretary of commerce pursuant to this
act and eligibility for any tax-related benefits under this act. The contents
of the completed form shall be confidential except as provided in K.S.A.
79-32,234, and amendments thereto.
(j) The secretary of commerce or the secretary of revenue may adopt
rules and regulations for the implementation of this act.
New Sec. 3. (a) (1) For taxable years commencing on and after
January 1, 2024, a qualified company that makes a qualified business
investment in a qualified business facility and meets the requirements of
section 2, and amendments thereto, and this section shall be allowed a
credit for such investment as provided by this section against the tax
imposed by the Kansas income tax act, the premium tax or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto.
(2) The credit shall be earned by the taxpayer each taxable year based
on the amount of the qualified investment made in that taxable year as
further provided in this section. The entire amount of the credit that is
earned each taxable year shall not be claimed by the taxpayer in the
taxable year that such credit is earned but shall be divided into equal
portions or installments, as determined by the secretary. A portion or
installment shall be claimed by the qualified company commencing with
the taxable year after the credit is earned and an equivalent amount of such
portion or installment shall be claimed in each of the next successive
taxable years for not less than a total of five taxable years, as determined
by the secretary.
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(3) The amount of the tax credit earned in a taxable year pursuant to
this subsection shall be up to 10%, at the discretion of the secretary, of the
entire amount of the qualified investment that is invested during such
taxable year, except for qualified investments for eligible projects located
outside of a metropolitan county. For eligible projects located outside of a
metropolitan county, the amount of the tax credit earned in a taxable year
shall be 10%. Such percentage shall be set forth in the agreement pursuant
to section 2, and amendments thereto. The total qualified investment shall
be completed within five years commencing from the date specified in the
agreement. The total amount of the qualified investment shall be at least
$250,000,000 for a qualified company that submits an application to
construct a qualified business facility for an electric or hydrogen motor
vehicle assembly operation project.
(b) The secretary of commerce shall set forth in the agreement
entered into pursuant to section 2, and amendments thereto, a percentage
of the earned tax credit that may be refundable when claimed. Such
percentage of a tax credit installment may be refundable to such taxpayer
if the amount of the tax credit claimed for that taxable year exceeds the
taxpayer's tax liability for such year. No earned tax credit shall be
refundable after the taxable year that such credit may be claimed.
(c) The qualified company or qualified companies shall meet the
requirements of this act, any rules and regulations of the secretary of
commerce under this act and the terms of the agreement to receive a credit
each year that a credit is earned or an installment portion of the earned
credit is claimed. No credit shall be issued by the secretary of revenue
unless the qualified company or qualified companies has been certified by
the secretary of commerce as eligible as provided by section 2, and
amendments thereto, for each taxable year that the credit is claimed. The
secretary of commerce shall provide such certifications to the secretary of
revenue.
(d) (1) If the qualified company or qualified companies breach the
terms and conditions of the agreement entered into pursuant to section 2,
and amendments thereto, except as provided in paragraph (2), fail to reach
at least 90% of the qualified investment required under section 2, and
amendments thereto, the qualified company or qualified companies shall
be liable for repayment of the amount of the tax credits to the state and all
other benefits received under this act as provided by section 2, and
amendments thereto.
(2) Any qualified company that submits an application to construct a
qualified business facility for an electric or hydrogen motor vehicle
assembly operation project shall repay to the state all tax credits received
if the total qualified investment required by subsection (a)(3) is not
completed by the project completion date as specified in the agreement
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pursuant to section 2, and amendments thereto.
(e) As a condition for claiming credits pursuant to this section, any
qualified company or qualified companies shall provide information
pursuant to K.S.A. 79-32,243, and amendments thereto, as part of the tax
return in which such credits are claimed. Such credits shall not be denied
solely on the basis of the contents of the information provided by a
qualified company pursuant to K.S.A. 79-32,243, and amendments thereto.
New Sec. 4. (a) For taxable years commencing on and after January
1, 2024, a qualified company that meets the requirements of section 2, and
amendments thereto, and this section may be eligible to retain up to 100%,
as determined by the secretary, of the qualified company's Kansas payroll
withholding taxes under the Kansas withholding and declaration of
estimated tax act for the qualified company's employees. The percentage
of withholding taxes to be retained each year shall be set forth in the
agreement pursuant to section 2, and amendments thereto. As a condition
of receiving and retaining this benefit, the qualified company shall agree to
maintain a median wage or average wage, as specified by the secretary,
paid to new employees, as are required by section 2, and amendments
thereto, that is equal to or greater than 120% of the county median wage of
the county where such employees are employed by the qualified company.
Such median or average wage paid to new employees shall be maintained
in each taxable year that the qualified company claims this benefit and
throughout the term of the agreement with the secretary. The secretary may
also require, as a condition of receiving this benefit, that the qualified
company meet specified performance or other targets. Any such
requirements shall be set forth in the agreement with the secretary. This
benefit shall be available for a period of up to 10 successive taxable years,
as determined by the secretary. A qualified company or qualified
companies shall be eligible to earn benefits of this section commencing on
the date that the qualified company or qualified companies enter into an
agreement with the secretary as provided in section 2, and amendments
thereto, or a date as determined by the secretary, but not later than three
calendar years after the year the qualified company enters into the
agreement with the secretary.
(b) The agreement between the secretary of commerce and a qualified
company pursuant to section 2, and amendments thereto, shall specify that,
if a qualified company breaches the terms and conditions set forth in the
agreement and is unable to hire and or retain a minimum of 90% of the
number of new employees as specified in the agreement and as required
pursuant to section 2, and amendments thereto, a qualified company shall
be required to remit to the state an amount that shall be determined by
comparing the shortfall in job creation and retention, expressed as a
percentage, to the amount of the aggregate Kansas payroll withholding
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taxes retained by the qualified company or remitted to the qualified
company by a third party.
(c) For each year that the agreement is in effect, the secretary of
commerce shall certify to the secretary of revenue:
(1) That a qualified company is eligible to receive benefits under this
act and the terms of the agreement;
(2) the number of employees;
(3) the amount of gross wages being paid to each such employee; and
(4) the percentage of payroll withholding taxes to be retained by the
qualified company.
(d) Any qualified company that receives benefits pursuant to this
section, shall complete and submit to the department of revenue the
amount of Kansas payroll withholding tax being retained by a qualified
company in the form and manner prescribed by the director of taxation.
(f) The secretary of revenue and the secretary of commerce shall
cooperate to develop and coordinate procedures to implement the
provisions of this act.
New Sec. 5. (a) On and after July 1, 2024, a qualified company that
meets the requirements of section 2, and amendments thereto, and this
section and that has entered into an agreement with the secretary, as
provided by section 2, and amendments thereto, may be eligible for
reimbursement for up to one year of training and education eligible
expenses for training or education completed by each new employee, as
determined by the secretary and as provided by this section. The maximum
amount of reimbursement paid to a qualified company shall be $5,000,000
per qualifying project.
(b) A qualified company shall be eligible commencing on the date the
qualified company enters into an agreement with the secretary as provided
in section 2, and amendments thereto, or on a date determined by the
secretary and set forth in the agreement. Only training and education
expenses for new employees that can establish residency in Kansas at the
completion of the training or education program and are employed at a
qualified business facility of a qualified company that is located and
operating in Kansas shall be eligible for reimbursement.
(c) As a condition of receiving and retaining this benefit, the qualified
company shall agree to annually provide evidence of eligibility as required
by this section and the terms of the agreement under section 2, and
amendments thereto, to the secretary. Such evidence shall include the
number of new hires, amount of eligible training and education expense,
state residency of the employee trainee at the completion of the training
and any other evidence reasonably required by the secretary for each year
that the incentive is claimed.
(d) Subject to appropriations therefor, reimbursement in the amount
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approved by the secretary and pursuant to the terms of the agreement and
the limitations of subsection (a) shall be made by the secretary or the
secretary's designee from the transformation of passenger and freight
vehicle industry act new employee training and education fund established
in section 6, and amendments thereto.
(e) No reimbursement shall be issued unless the qualified company
has demonstrated to the satisfaction of the secretary that the employee
trainee has established Kansas residency by the completion date of their
training and has been certified by the secretary, as provided in section 2,
and amendments thereto, as meeting all requirements of this act, any rules
and regulations of the secretary and the agreement executed pursuant to
section 2, and amendments thereto.
(f) If a qualified company breaches the terms and conditions of the
agreement pursuant to section 2, and amendments thereto, or the
requirements of this section, reimbursements shall be repaid to the state as
provided by section 2, and amendments thereto.
New Sec. 6. There is hereby established in the state treasury the
transformation of passenger and freight vehicle industry act new employee
training and education fund to be administered by the secretary of
commerce. All moneys credited to the transformation of passenger and
freight vehicle industry act new employee training and education fund
shall be used by the Kansas department of commerce for reimbursement to
qualified companies for training and education eligible expenses pursuant
to the provisions of sections 2 and 5, and amendments thereto. All
expenditures from the transformation of passenger and freight vehicle
industry act new employee training and education fund shall be made in
accordance with appropriation acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the
secretary of commerce or the secretary's designee.
New Sec. 7. (a) On and after July 1, 2024, a qualified company that
meets the requirements of section 2, and amendments thereto, and this
section may be eligible for a sales tax exemption under the provisions of
K.S.A. 79-3606(oooo), and amendments thereto, if approved by the
secretary.
(b) Qualified companies that satisfy such requirements may receive
the sales tax exemption commencing on the date that the qualified
company begins construction of the qualified business facility, as
determined by the secretary of commerce, or an earlier date if agreed by
the secretary and incorporated into the agreement pursuant to section 2,
and amendments thereto.
(c) The secretary of commerce shall provide notice to the secretary of
revenue regarding an approval of a sales tax exemption. The sales tax
exemption shall be valid until construction of the qualified business
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facility has been completed as certified by the secretary of commerce to
the secretary of revenue or the date specified for completion of the
qualified business facility in the agreement executed pursuant to section 2,
and amendments thereto, whichever occurs first. No sales tax exemption
shall be issued by the secretary of revenue unless the qualified company or
qualified companies has been certified by the secretary of commerce, as
provided in section 2, and amendments thereto, as meeting all
requirements of this act, applicable rules and regulations and the
agreement executed pursuant to section 2, and amendments thereto.
(d) A sales tax exemption shall be revoked by the secretary of
revenue upon notification by the secretary of commerce that the qualified
company has been disapproved by the secretary of commerce.
(e) If a qualified company breaches the terms and conditions of the
agreement pursuant to section 2, and amendments thereto, and is unable to
hire and or retain a minimum of 90% of the number of new employees as
specified in the agreement or as required pursuant to section 2, and
amendments thereto, a qualified company shall be required to remit to the
state an amount that shall be determined by comparing the shortfall in job
creation and retention, expressed as a percentage, to the amount of the
sales tax exemption as provided by section 2, and amendments thereto.
New Sec. 8. (a) On or before January 31 of each year, the secretary of
commerce shall transmit to the governor, the senate committees on
assessment and taxation and commerce and the house of representatives
committees on taxation and commerce, labor and economic development,
or any successor committee, a report based on information received from
each qualified company receiving benefits under this act, describing, at a
minimum:
(1) The names of the qualified companies;
(2) the types of qualified companies utilizing the act;
(3) the location of such companies and the location, description and
economic and industry impact of such companies' business operations in
Kansas;
(4) the cumulative number of new employees hired and the new
employees hired in that calendar year, with respect to each qualified
company;
(5) the number of employees who reside in Kansas and the number of
employees who reside in other states, designated with respect to each other
state and, if available, the number of employees who have relocated to
Kansas from another state;
(6) the wages paid for such new employees;
(7) the annual and cumulative amount of investments made;
(8) the annual amount of each benefit provided under this act;
(9) the estimated net state fiscal impact, including the direct and
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indirect new state taxes derived from the new employees hired;
(10) an estimate of the multiplier effect on the Kansas economy of the
benefits received under this act; and
(11) any material defaults by a qualified company of the terms of any
agreement pursuant to section 2, and amendments thereto.
Sec. 9. K.S.A. 2023 Supp. 79-3606 is hereby amended to read as
follows: 79-3606. The following shall be exempt from the tax imposed by
this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales
or excise tax has been paid, not subject to refund, under the laws of this
state except cigarettes and electronic cigarettes as defined by K.S.A. 79-
3301, and amendments thereto, including consumable material for such
electronic cigarettes, cereal malt beverages and malt products as defined
by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt,
malt syrup and malt extract, that is not subject to taxation under the
provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles
taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed
pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and
laundry services taxed pursuant to K.S.A. 65-34,150, and amendments
thereto, and gross receipts from regulated sports contests taxed pursuant to
the Kansas professional regulated sports act, and amendments thereto;
(b) all sales of tangible personal property or service, including the
renting and leasing of tangible personal property, purchased directly by the
state of Kansas, a political subdivision thereof, other than a school or
educational institution, or purchased by a public or private nonprofit
hospital, public hospital authority, nonprofit blood, tissue or organ bank or
nonprofit integrated community care organization and used exclusively for
state, political subdivision, hospital, public hospital authority, nonprofit
blood, tissue or organ bank or nonprofit integrated community care
organization purposes, except when: (1) Such state, hospital or public
hospital authority is engaged or proposes to engage in any business
specifically taxable under the provisions of this act and such items of
tangible personal property or service are used or proposed to be used in
such business; or (2) such political subdivision is engaged or proposes to
engage in the business of furnishing gas, electricity or heat to others and
such items of personal property or service are used or proposed to be used
in such business;
(c) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly by a
public or private elementary or secondary school or public or private
nonprofit educational institution and used primarily by such school or
institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of
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buildings to be used for such purposes. The exemption herein provided
shall not apply to erection, construction, repair, enlargement or equipment
of buildings used primarily for human habitation, except that such
exemption shall apply to the erection, construction, repair, enlargement or
equipment of buildings used for human habitation by the cerebral palsy
research foundation of Kansas located in Wichita, Kansas, and multi
community diversified services, incorporated, located in McPherson,
Kansas;
(d) all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for
any public or private nonprofit hospital or public hospital authority, public
or private elementary or secondary school, a public or private nonprofit
educational institution, state correctional institution including a privately
constructed correctional institution contracted for state use and ownership,
that would be exempt from taxation under the provisions of this act if
purchased directly by such hospital or public hospital authority, school,
educational institution or a state correctional institution; and all sales of
tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any political subdivision
of the state or district described in subsection (s), the total cost of which is
paid from funds of such political subdivision or district and that would be
exempt from taxation under the provisions of this act if purchased directly
by such political subdivision or district. Nothing in this subsection or in
the provisions of K.S.A. 12-3418, and amendments thereto, shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any political
subdivision of the state or any such district. As used in this subsection,
K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a
political subdivision" shall mean general tax revenues, the proceeds of any
bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
purpose of constructing, equipping, reconstructing, repairing, enlarging,
furnishing or remodeling facilities that are to be leased to the donor. When
any political subdivision of the state, district described in subsection (s),
public or private nonprofit hospital or public hospital authority, public or
private elementary or secondary school, public or private nonprofit
educational institution, state correctional institution including a privately
constructed correctional institution contracted for state use and ownership
shall contract for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities, it
shall obtain from the state and furnish to the contractor an exemption
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certificate for the project involved, and the contractor may purchase
materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing
the number of such certificate. Upon completion of the project the
contractor shall furnish to the political subdivision, district described in
subsection (s), hospital or public hospital authority, school, educational
institution or department of corrections concerned a sworn statement, on a
form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alternative to the
foregoing procedure, any such contracting entity may apply to the
secretary of revenue for agent status for the sole purpose of issuing and
furnishing project exemption certificates to contractors pursuant to rules
and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices
shall be held by the contractor for a period of five years and shall be
subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the
building or other project or not to have been returned for credit or the sales
or compensating tax otherwise imposed upon such materials that will not
be so incorporated in the building or other project reported and paid by
such contractor to the director of taxation not later than the 20
th
day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, the political subdivision, district described in
subsection (s), hospital or public hospital authority, school, educational
institution or the contractor contracting with the department of corrections
for a correctional institution concerned shall be liable for tax on all
materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney
fees. Any contractor or any agent, employee or subcontractor thereof, who
shall use or otherwise dispose of any materials purchased under such a
certificate for any purpose other than that for which such a certificate is
issued without the payment of the sales or compensating tax otherwise
imposed upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(e) all sales of tangible personal property or services purchased by a
contractor for the erection, repair or enlargement of buildings or other
projects for the government of the United States, its agencies or
instrumentalities, that would be exempt from taxation if purchased directly
by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or
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instrumentalities shall contract for the erection, repair, or enlargement of
any building or other project, it shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificates to all suppliers
from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to the government of
the United States, its agencies or instrumentalities concerned a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. As an
alternative to the foregoing procedure, any such contracting entity may
apply to the secretary of revenue for agent status for the sole purpose of
issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing
conditions and standards for the granting and maintaining of such status.
All invoices shall be held by the contractor for a period of five years and
shall be subject to audit by the director of taxation. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(f) tangible personal property purchased by a railroad or public utility
for consumption or movement directly and immediately in interstate
commerce;
(g) sales of aircraft including remanufactured and modified aircraft
sold to persons using directly or through an authorized agent such aircraft
as certified or licensed carriers of persons or property in interstate or
foreign commerce under authority of the laws of the United States or any
foreign government or sold to any foreign government or agency or
instrumentality of such foreign government and all sales of aircraft for use
outside of the United States and sales of aircraft repair, modification and
replacement parts and sales of services employed in the remanufacture,
modification and repair of aircraft;
(h) all rentals of nonsectarian textbooks by public or private
elementary or secondary schools;
(i) the lease or rental of all films, records, tapes, or any type of sound
or picture transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of
such meals to employees of any restaurant, eating house, dining car, hotel,
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drugstore or other place where meals or drinks are regularly sold to the
public if such employees' duties are related to the furnishing or sale of
such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are
defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and
delivered in this state to a bona fide resident of another state, which motor
vehicle, semitrailer, pole trailer or aircraft is not to be registered or based
in this state and which vehicle, semitrailer, pole trailer or aircraft will not
remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property,
services, substances or things, except isolated or occasional sale of motor
vehicles specifically taxed under the provisions of K.S.A. 79-3603(o), and
amendments thereto;
(m) all sales of tangible personal property that become an ingredient
or component part of tangible personal property or services produced,
manufactured or compounded for ultimate sale at retail within or without
the state of Kansas; and any such producer, manufacturer or compounder
may obtain from the director of taxation and furnish to the supplier an
exemption certificate number for tangible personal property for use as an
ingredient or component part of the property or services produced,
manufactured or compounded;
(n) all sales of tangible personal property that is consumed in the
production, manufacture, processing, mining, drilling, refining or
compounding of tangible personal property, the treating of by-products or
wastes derived from any such production process, the providing of
services or the irrigation of crops for ultimate sale at retail within or
without the state of Kansas; and any purchaser of such property may
obtain from the director of taxation and furnish to the supplier an
exemption certificate number for tangible personal property for
consumption in such production, manufacture, processing, mining,
drilling, refining, compounding, treating, irrigation and in providing such
services;
(o) all sales of animals, fowl and aquatic plants and animals, the
primary purpose of which is use in agriculture or aquaculture, as defined in
K.S.A. 47-1901, and amendments thereto, the production of food for
human consumption, the production of animal, dairy, poultry or aquatic
plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;
(p) all sales of drugs dispensed pursuant to a prescription order by a
licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-
1626, and amendments thereto. As used in this subsection, "drug" means a
compound, substance or preparation and any component of a compound,
substance or preparation, other than food and food ingredients, dietary
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supplements or alcoholic beverages, recognized in the official United
States pharmacopeia, official homeopathic pharmacopoeia of the United
States or official national formulary, and supplement to any of them,
intended for use in the diagnosis, cure, mitigation, treatment or prevention
of disease or intended to affect the structure or any function of the body,
except that for taxable years commencing after December 31, 2013, this
subsection shall not apply to any sales of drugs used in the performance or
induction of an abortion, as defined in K.S.A. 65-6701, and amendments
thereto;
(q) all sales of insulin dispensed by a person licensed by the state
board of pharmacy to a person for treatment of diabetes at the direction of
a person licensed to practice medicine by the state board of healing arts;
(r) all sales of oxygen delivery equipment, kidney dialysis equipment,
enteral feeding systems, prosthetic devices and mobility enhancing
equipment prescribed in writing by a person licensed to practice the
healing arts, dentistry or optometry, and in addition to such sales, all sales
of hearing aids, as defined by K.S.A. 74-5807(c), and amendments thereto,
and repair and replacement parts therefor, including batteries, by a person
licensed in the practice of dispensing and fitting hearing aids pursuant to
the provisions of K.S.A. 74-5808, and amendments thereto. For the
purposes of this subsection: (1) "Mobility enhancing equipment" means
equipment including repair and replacement parts to same, but does not
include durable medical equipment, which is primarily and customarily
used to provide or increase the ability to move from one place to another
and which is appropriate for use either in a home or a motor vehicle; is not
generally used by persons with normal mobility; and does not include any
motor vehicle or equipment on a motor vehicle normally provided by a
motor vehicle manufacturer; and (2) "prosthetic device" means a
replacement, corrective or supportive device including repair and
replacement parts for same worn on or in the body to artificially replace a
missing portion of the body, prevent or correct physical deformity or
malfunction or support a weak or deformed portion of the body;
(s) except as provided in K.S.A. 82a-2101, and amendments thereto,
all sales of tangible personal property or services purchased directly or
indirectly by a groundwater management district organized or operating
under the authority of K.S.A. 82a-1020 et seq., and amendments thereto,
by a rural water district organized or operating under the authority of
K.S.A. 82a-612, and amendments thereto, or by a water supply district
organized or operating under the authority of K.S.A. 19-3501 et seq., 19-
3522 et seq. or 19-3545, and amendments thereto, which property or
services are used in the construction activities, operation or maintenance of
the district;
(t) all sales of farm machinery and equipment or aquaculture
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machinery and equipment, repair and replacement parts therefor and
services performed in the repair and maintenance of such machinery and
equipment. For the purposes of this subsection the term "farm machinery
and equipment or aquaculture machinery and equipment" shall include a
work-site utility vehicle, as defined in K.S.A. 8-126, and amendments
thereto, and is equipped with a bed or cargo box for hauling materials, and
shall also include machinery and equipment used in the operation of
Christmas tree farming but shall not include any passenger vehicle, truck,
truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as
such terms are defined by K.S.A. 8-126, and amendments thereto. "Farm
machinery and equipment" includes precision farming equipment that is
portable or is installed or purchased to be installed on farm machinery and
equipment. "Precision farming equipment" includes the following items
used only in computer-assisted farming, ranching or aquaculture
production operations: Soil testing sensors, yield monitors, computers,
monitors, software, global positioning and mapping systems, guiding
systems, modems, data communications equipment and any necessary
mounting hardware, wiring and antennas. Each purchaser of farm
machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales
ticket to be retained by the seller that the farm machinery and equipment
or aquaculture machinery and equipment purchased will be used only in
farming, ranching or aquaculture production. Farming or ranching shall
include the operation of a feedlot and farm and ranch work for hire and the
operation of a nursery;
(u) all leases or rentals of tangible personal property used as a
dwelling if such tangible personal property is leased or rented for a period
of more than 28 consecutive days;
(v) all sales of tangible personal property to any contractor for use in
preparing meals for delivery to homebound elderly persons over 60 years
of age and to homebound disabled persons or to be served at a group-
sitting at a location outside of the home to otherwise homebound elderly
persons over 60 years of age and to otherwise homebound disabled
persons, as all or part of any food service project funded in whole or in
part by government or as part of a private nonprofit food service project
available to all such elderly or disabled persons residing within an area of
service designated by the private nonprofit organization, and all sales of
tangible personal property for use in preparing meals for consumption by
indigent or homeless individuals whether or not such meals are consumed
at a place designated for such purpose, and all sales of food products by or
on behalf of any such contractor or organization for any such purpose;
(w) all sales of natural gas, electricity, heat and water delivered
through mains, lines or pipes: (1) To residential premises for
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noncommercial use by the occupant of such premises; (2) for agricultural
use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property
taxation pursuant to K.S.A. 79-201b, Second through Sixth. As used in this
paragraph, "severing" means the same as defined in K.S.A. 79-4216(k),
and amendments thereto. For all sales of natural gas, electricity and heat
delivered through mains, lines or pipes pursuant to the provisions of
subsection (w)(1) and (w)(2), the provisions of this subsection shall expire
on December 31, 2005;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources
for the production of heat or lighting for noncommercial use of an
occupant of residential premises occurring prior to January 1, 2006;
(y) all sales of materials and services used in the repairing, servicing,
altering, maintaining, manufacturing, remanufacturing, or modification of
railroad rolling stock for use in interstate or foreign commerce under
authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased
directly by a port authority or by a contractor therefor as provided by the
provisions of K.S.A. 12-3418, and amendments thereto;
(aa) all sales of materials and services applied to equipment that is
transported into the state from without the state for repair, service,
alteration, maintenance, remanufacture or modification and that is
subsequently transported outside the state for use in the transmission of
liquids or natural gas by means of pipeline in interstate or foreign
commerce under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used
in this subsection: (1) "Mobile homes" and "manufactured homes" mean
the same as defined in K.S.A. 58-4202, and amendments thereto; and (2)
"sales of used mobile homes or manufactured homes" means sales other
than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased prior
to January 1, 2012, except as otherwise provided, for the purpose of and in
conjunction with constructing, reconstructing, enlarging or remodeling a
business or retail business that meets the requirements established in
K.S.A. 74-50,115, and amendments thereto, and the sale and installation of
machinery and equipment purchased for installation at any such business
or retail business, and all sales of tangible personal property or services
purchased on or after January 1, 2012, for the purpose of and in
conjunction with constructing, reconstructing, enlarging or remodeling a
business that meets the requirements established in K.S.A. 74-50,115(e),
and amendments thereto, and the sale and installation of machinery and
equipment purchased for installation at any such business. When a person
shall contract for the construction, reconstruction, enlargement or
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remodeling of any such business or retail business, such person shall
obtain from the state and furnish to the contractor an exemption certificate
for the project involved, and the contractor may purchase materials,
machinery and equipment for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom
such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to the owner of the
business or retail business a sworn statement, on a form to be provided by
the director of taxation, that all purchases so made were entitled to
exemption under this subsection. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the
director of taxation. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials,
machinery or equipment purchased under such a certificate for any
purpose other than that for which such a certificate is issued without the
payment of the sales or compensating tax otherwise imposed thereon, shall
be guilty of a misdemeanor and, upon conviction therefor, shall be subject
to the penalties provided for in K.S.A. 79-3615(h), and amendments
thereto. As used in this subsection, "business" and "retail business" mean
the same as defined in K.S.A. 74-50,114, and amendments thereto. Project
exemption certificates that have been previously issued under this
subsection by the department of revenue pursuant to K.S.A. 74-50,115,
and amendments thereto, but not including K.S.A. 74-50,115(e), and
amendments thereto, prior to January 1, 2012, and have not expired will be
effective for the term of the project or two years from the effective date of
the certificate, whichever occurs earlier. Project exemption certificates that
are submitted to the department of revenue prior to January 1, 2012, and
are found to qualify will be issued a project exemption certificate that will
be effective for a two-year period or for the term of the project, whichever
occurs earlier;
(dd) all sales of tangible personal property purchased with food
stamps issued by the United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery
operated by the state of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or
manufactured homes to the extent of 40% of the gross receipts, determined
without regard to any trade-in allowance, received from such sale. As used
in this subsection, "mobile homes" and "manufactured homes" mean the
same as defined in K.S.A. 58-4202, and amendments thereto;
(gg) all sales of tangible personal property purchased in accordance
with vouchers issued pursuant to the federal special supplemental food
program for women, infants and children;
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(hh) all sales of medical supplies and equipment, including durable
medical equipment, purchased directly by a nonprofit skilled nursing home
or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to
residents thereof. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes. As used in this
subsection, "durable medical equipment" means equipment including
repair and replacement parts for such equipment, that can withstand
repeated use, is primarily and customarily used to serve a medical purpose,
generally is not useful to a person in the absence of illness or injury and is
not worn in or on the body, but does not include mobility enhancing
equipment as defined in subsection (r), oxygen delivery equipment, kidney
dialysis equipment or enteral feeding systems;
(ii) all sales of tangible personal property purchased directly by a
nonprofit organization for nonsectarian comprehensive multidiscipline
youth development programs and activities provided or sponsored by such
organization, and all sales of tangible personal property by or on behalf of
any such organization. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly on
behalf of a community-based facility for people with intellectual disability
or mental health center organized pursuant to K.S.A. 19-4001 et seq., and
amendments thereto, and licensed in accordance with the provisions of
K.S.A. 39-2001 et seq., and amendments thereto, and all sales of tangible
personal property or services purchased by contractors during the time
period from July, 2003, through June, 2006, for the purpose of
constructing, equipping, maintaining or furnishing a new facility for a
community-based facility for people with intellectual disability or mental
health center located in Riverton, Cherokee County, Kansas, that would
have been eligible for sales tax exemption pursuant to this subsection if
purchased directly by such facility or center. This exemption shall not
apply to tangible personal property customarily used for human habitation
purposes;
(kk) (1) (A) all sales of machinery and equipment that are used in this
state as an integral or essential part of an integrated production operation
by a manufacturing or processing plant or facility;
(B) all sales of installation, repair and maintenance services
performed on such machinery and equipment; and
(C) all sales of repair and replacement parts and accessories
purchased for such machinery and equipment.
(2) For purposes of this subsection:
(A) "Integrated production operation" means an integrated series of
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operations engaged in at a manufacturing or processing plant or facility to
process, transform or convert tangible personal property by physical,
chemical or other means into a different form, composition or character
from that in which it originally existed. Integrated production operations
shall include: (i) Production line operations, including packaging
operations; (ii) preproduction operations to handle, store and treat raw
materials; (iii) post production handling, storage, warehousing and
distribution operations; and (iv) waste, pollution and environmental
control operations, if any;
(B) "production line" means the assemblage of machinery and
equipment at a manufacturing or processing plant or facility where the
actual transformation or processing of tangible personal property occurs;
(C) "manufacturing or processing plant or facility" means a single,
fixed location owned or controlled by a manufacturing or processing
business that consists of one or more structures or buildings in a
contiguous area where integrated production operations are conducted to
manufacture or process tangible personal property to be ultimately sold at
retail. Such term shall not include any facility primarily operated for the
purpose of conveying or assisting in the conveyance of natural gas,
electricity, oil or water. A business may operate one or more manufacturing
or processing plants or facilities at different locations to manufacture or
process a single product of tangible personal property to be ultimately sold
at retail;
(D) "manufacturing or processing business" means a business that
utilizes an integrated production operation to manufacture, process,
fabricate, finish or assemble items for wholesale and retail distribution as
part of what is commonly regarded by the general public as an industrial
manufacturing or processing operation or an agricultural commodity
processing operation. (i) Industrial manufacturing or processing operations
include, by way of illustration but not of limitation, the fabrication of
automobiles, airplanes, machinery or transportation equipment, the
fabrication of metal, plastic, wood or paper products, electricity power
generation, water treatment, petroleum refining, chemical production,
wholesale bottling, newspaper printing, ready mixed concrete production,
and the remanufacturing of used parts for wholesale or retail sale. Such
processing operations shall include operations at an oil well, gas well,
mine or other excavation site where the oil, gas, minerals, coal, clay, stone,
sand or gravel that has been extracted from the earth is cleaned, separated,
crushed, ground, milled, screened, washed or otherwise treated or prepared
before its transmission to a refinery or before any other wholesale or retail
distribution. (ii) Agricultural commodity processing operations include, by
way of illustration but not of limitation, meat packing, poultry slaughtering
and dressing, processing and packaging farm and dairy products in sealed
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containers for wholesale and retail distribution, feed grinding, grain
milling, frozen food processing, and grain handling, cleaning, blending,
fumigation, drying and aeration operations engaged in by grain elevators
or other grain storage facilities. (iii) Manufacturing or processing
businesses do not include, by way of illustration but not of limitation,
nonindustrial businesses whose operations are primarily retail and that
produce or process tangible personal property as an incidental part of
conducting the retail business, such as retailers who bake, cook or prepare
food products in the regular course of their retail trade, grocery stores,
meat lockers and meat markets that butcher or dress livestock or poultry in
the regular course of their retail trade, contractors who alter, service, repair
or improve real property, and retail businesses that clean, service or
refurbish and repair tangible personal property for its owner;
(E) "repair and replacement parts and accessories" means all parts
and accessories for exempt machinery and equipment, including, but not
limited to, dies, jigs, molds, patterns and safety devices that are attached to
exempt machinery or that are otherwise used in production, and parts and
accessories that require periodic replacement such as belts, drill bits,
grinding wheels, grinding balls, cutting bars, saws, refractory brick and
other refractory items for exempt kiln equipment used in production
operations;
(F) "primary" or "primarily" mean more than 50% of the time.
(3) For purposes of this subsection, machinery and equipment shall
be deemed to be used as an integral or essential part of an integrated
production operation when used to:
(A) Receive, transport, convey, handle, treat or store raw materials in
preparation of its placement on the production line;
(B) transport, convey, handle or store the property undergoing
manufacturing or processing at any point from the beginning of the
production line through any warehousing or distribution operation of the
final product that occurs at the plant or facility;
(C) act upon, effect, promote or otherwise facilitate a physical change
to the property undergoing manufacturing or processing;
(D) guide, control or direct the movement of property undergoing
manufacturing or processing;
(E) test or measure raw materials, the property undergoing
manufacturing or processing or the finished product, as a necessary part of
the manufacturer's integrated production operations;
(F) plan, manage, control or record the receipt and flow of inventories
of raw materials, consumables and component parts, the flow of the
property undergoing manufacturing or processing and the management of
inventories of the finished product;
(G) produce energy for, lubricate, control the operating of or
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otherwise enable the functioning of other production machinery and
equipment and the continuation of production operations;
(H) package the property being manufactured or processed in a
container or wrapping in which such property is normally sold or
transported;
(I) transmit or transport electricity, coke, gas, water, steam or similar
substances used in production operations from the point of generation, if
produced by the manufacturer or processor at the plant site, to that
manufacturer's production operation; or, if purchased or delivered from
off-site, from the point where the substance enters the site of the plant or
facility to that manufacturer's production operations;
(J) cool, heat, filter, refine or otherwise treat water, steam, acid, oil,
solvents or other substances that are used in production operations;
(K) provide and control an environment required to maintain certain
levels of air quality, humidity or temperature in special and limited areas
of the plant or facility, where such regulation of temperature or humidity is
part of and essential to the production process;
(L) treat, transport or store waste or other byproducts of production
operations at the plant or facility; or
(M) control pollution at the plant or facility where the pollution is
produced by the manufacturing or processing operation.
(4) The following machinery, equipment and materials shall be
deemed to be exempt even though it may not otherwise qualify as
machinery and equipment used as an integral or essential part of an
integrated production operation: (A) Computers and related peripheral
equipment that are utilized by a manufacturing or processing business for
engineering of the finished product or for research and development or
product design; (B) machinery and equipment that is utilized by a
manufacturing or processing business to manufacture or rebuild tangible
personal property that is used in manufacturing or processing operations,
including tools, dies, molds, forms and other parts of qualifying machinery
and equipment; (C) portable plants for aggregate concrete, bulk cement
and asphalt including cement mixing drums to be attached to a motor
vehicle; (D) industrial fixtures, devices, support facilities and special
foundations necessary for manufacturing and production operations, and
materials and other tangible personal property sold for the purpose of
fabricating such fixtures, devices, facilities and foundations. An exemption
certificate for such purchases shall be signed by the manufacturer or
processor. If the fabricator purchases such material, the fabricator shall
also sign the exemption certificate; (E) a manufacturing or processing
business' laboratory equipment that is not located at the plant or facility,
but that would otherwise qualify for exemption under subsection (3)(E);
(F) all machinery and equipment used in surface mining activities as
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described in K.S.A. 49-601 et seq., and amendments thereto, beginning
from the time a reclamation plan is filed to the acceptance of the
completed final site reclamation.
(5) "Machinery and equipment used as an integral or essential part of
an integrated production operation" shall not include:
(A) Machinery and equipment used for nonproduction purposes,
including, but not limited to, machinery and equipment used for plant
security, fire prevention, first aid, accounting, administration, record
keeping, advertising, marketing, sales or other related activities, plant
cleaning, plant communications and employee work scheduling;
(B) machinery, equipment and tools used primarily in maintaining
and repairing any type of machinery and equipment or the building and
plant;
(C) transportation, transmission and distribution equipment not
primarily used in a production, warehousing or material handling
operation at the plant or facility, including the means of conveyance of
natural gas, electricity, oil or water, and equipment related thereto, located
outside the plant or facility;
(D) office machines and equipment including computers and related
peripheral equipment not used directly and primarily to control or measure
the manufacturing process;
(E) furniture and other furnishings;
(F) buildings, other than exempt machinery and equipment that is
permanently affixed to or becomes a physical part of the building, and any
other part of real estate that is not otherwise exempt;
(G) building fixtures that are not integral to the manufacturing
operation, such as utility systems for heating, ventilation, air conditioning,
communications, plumbing or electrical;
(H) machinery and equipment used for general plant heating, cooling
and lighting;
(I) motor vehicles that are registered for operation on public
highways; or
(J) employee apparel, except safety and protective apparel that is
purchased by an employer and furnished gratuitously to employees who
are involved in production or research activities.
(6) Paragraphs (3) and (5) shall not be construed as exclusive listings
of the machinery and equipment that qualify or do not qualify as an
integral or essential part of an integrated production operation. When
machinery or equipment is used as an integral or essential part of
production operations part of the time and for nonproduction purposes at
other times, the primary use of the machinery or equipment shall
determine whether or not such machinery or equipment qualifies for
exemption.
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(7) The secretary of revenue shall adopt rules and regulations
necessary to administer the provisions of this subsection;
(ll) all sales of educational materials purchased for distribution to the
public at no charge by a nonprofit corporation organized for the purpose of
encouraging, fostering and conducting programs for the improvement of
public health, except that for taxable years commencing after December
31, 2013, this subsection shall not apply to any sales of such materials
purchased by a nonprofit corporation which performs any abortion, as
defined in K.S.A. 65-6701, and amendments thereto;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides,
herbicides, germicides, pesticides and fungicides; and services, purchased
and used for the purpose of producing plants in order to prevent soil
erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services
rendered by an advertising agency or licensed broadcast station or any
member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a community
action group or agency for the exclusive purpose of repairing or
weatherizing housing occupied by low-income individuals;
(pp) all sales of drill bits and explosives actually utilized in the
exploration and production of oil or gas;
(qq) all sales of tangible personal property and services purchased by
a nonprofit museum or historical society or any combination thereof,
including a nonprofit organization that is organized for the purpose of
stimulating public interest in the exploration of space by providing
educational information, exhibits and experiences, that is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986;
(rr) all sales of tangible personal property that will admit the
purchaser thereof to any annual event sponsored by a nonprofit
organization that is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, except that
for taxable years commencing after December 31, 2013, this subsection
shall not apply to any sales of such tangible personal property purchased
by a nonprofit organization which performs any abortion, as defined in
K.S.A. 65-6701, and amendments thereto;
(ss) all sales of tangible personal property and services purchased by
a public broadcasting station licensed by the federal communications
commission as a noncommercial educational television or radio station;
(tt) all sales of tangible personal property and services purchased by
or on behalf of a not-for-profit corporation that is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal
revenue code of 1986, for the sole purpose of constructing a Kansas
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Korean War memorial;
(uu) all sales of tangible personal property and services purchased by
or on behalf of any rural volunteer fire-fighting organization for use
exclusively in the performance of its duties and functions;
(vv) all sales of tangible personal property purchased by any of the
following organizations that are exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
for the following purposes, and all sales of any such property by or on
behalf of any such organization for any such purpose:
(1) The American heart association, Kansas affiliate, inc. for the
purposes of providing education, training, certification in emergency
cardiac care, research and other related services to reduce disability and
death from cardiovascular diseases and stroke;
(2) the Kansas alliance for the mentally ill, inc. for the purpose of
advocacy for persons with mental illness and to education, research and
support for their families;
(3) the Kansas mental illness awareness council for the purposes of
advocacy for persons who are mentally ill and for education, research and
support for them and their families;
(4) the American diabetes association Kansas affiliate, inc. for the
purpose of eliminating diabetes through medical research, public education
focusing on disease prevention and education, patient education including
information on coping with diabetes, and professional education and
training;
(5) the American lung association of Kansas, inc. for the purpose of
eliminating all lung diseases through medical research, public education
including information on coping with lung diseases, professional education
and training related to lung disease and other related services to reduce the
incidence of disability and death due to lung disease;
(6) the Kansas chapters of the Alzheimer's disease and related
disorders association, inc. for the purpose of providing assistance and
support to persons in Kansas with Alzheimer's disease, and their families
and caregivers;
(7) the Kansas chapters of the Parkinson's disease association for the
purpose of eliminating Parkinson's disease through medical research and
public and professional education related to such disease;
(8) the national kidney foundation of Kansas and western Missouri
for the purpose of eliminating kidney disease through medical research
and public and private education related to such disease;
(9) the heartstrings community foundation for the purpose of
providing training, employment and activities for adults with
developmental disabilities;
(10) the cystic fibrosis foundation, heart of America chapter, for the
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purposes of assuring the development of the means to cure and control
cystic fibrosis and improving the quality of life for those with the disease;
(11) the spina bifida association of Kansas for the purpose of
providing financial, educational and practical aid to families and
individuals with spina bifida. Such aid includes, but is not limited to,
funding for medical devices, counseling and medical educational
opportunities;
(12) the CHWC, Inc., for the purpose of rebuilding urban core
neighborhoods through the construction of new homes, acquiring and
renovating existing homes and other related activities, and promoting
economic development in such neighborhoods;
(13) the cross-lines cooperative council for the purpose of providing
social services to low income individuals and families;
(14) the dreams work, inc., for the purpose of providing young adult
day services to individuals with developmental disabilities and assisting
families in avoiding institutional or nursing home care for a
developmentally disabled member of their family;
(15) the KSDS, Inc., for the purpose of promoting the independence
and inclusion of people with disabilities as fully participating and
contributing members of their communities and society through the
training and providing of guide and service dogs to people with
disabilities, and providing disability education and awareness to the
general public;
(16) the lyme association of greater Kansas City, Inc., for the purpose
of providing support to persons with lyme disease and public education
relating to the prevention, treatment and cure of lyme disease;
(17) the dream factory, inc., for the purpose of granting the dreams of
children with critical and chronic illnesses;
(18) the Ottawa Suzuki strings, inc., for the purpose of providing
students and families with education and resources necessary to enable
each child to develop fine character and musical ability to the fullest
potential;
(19) the international association of lions clubs for the purpose of
creating and fostering a spirit of understanding among all people for
humanitarian needs by providing voluntary services through community
involvement and international cooperation;
(20) the Johnson county young matrons, inc., for the purpose of
promoting a positive future for members of the community through
volunteerism, financial support and education through the efforts of an all
volunteer organization;
(21) the American cancer society, inc., for the purpose of eliminating
cancer as a major health problem by preventing cancer, saving lives and
diminishing suffering from cancer, through research, education, advocacy
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and service;
(22) the community services of Shawnee, inc., for the purpose of
providing food and clothing to those in need;
(23) the angel babies association, for the purpose of providing
assistance, support and items of necessity to teenage mothers and their
babies; and
(24) the Kansas fairgrounds foundation for the purpose of the
preservation, renovation and beautification of the Kansas state fairgrounds;
(ww) all sales of tangible personal property purchased by the habitat
for humanity for the exclusive use of being incorporated within a housing
project constructed by such organization;
(xx) all sales of tangible personal property and services purchased by
a nonprofit zoo that is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, or on behalf
of such zoo by an entity itself exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986
contracted with to operate such zoo and all sales of tangible personal
property or services purchased by a contractor for the purpose of
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any nonprofit zoo that would be
exempt from taxation under the provisions of this section if purchased
directly by such nonprofit zoo or the entity operating such zoo. Nothing in
this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities for any nonprofit zoo. When any nonprofit zoo shall contract for
the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities, it shall obtain
from the state and furnish to the contractor an exemption certificate for the
project involved, and the contractor may purchase materials for
incorporation in such project. The contractor shall furnish the number of
such certificate to all suppliers from whom such purchases are made, and
such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project the contractor
shall furnish to the nonprofit zoo concerned a sworn statement, on a form
to be provided by the director of taxation, that all purchases so made were
entitled to exemption under this subsection. All invoices shall be held by
the contractor for a period of five years and shall be subject to audit by the
director of taxation. If any materials purchased under such a certificate are
found not to have been incorporated in the building or other project or not
to have been returned for credit or the sales or compensating tax otherwise
imposed upon such materials that will not be so incorporated in the
building or other project reported and paid by such contractor to the
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director of taxation not later than the 20
th
day of the month following the
close of the month in which it shall be determined that such materials will
not be used for the purpose for which such certificate was issued, the
nonprofit zoo concerned shall be liable for tax on all materials purchased
for the project, and upon payment thereof it may recover the same from
the contractor together with reasonable attorney fees. Any contractor or
any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(yy) all sales of tangible personal property and services purchased by
a parent-teacher association or organization, and all sales of tangible
personal property by or on behalf of such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-air,
free access radio or television station that is used directly and primarily for
the purpose of producing a broadcast signal or is such that the failure of
the machinery or equipment to operate would cause broadcasting to cease.
For purposes of this subsection, machinery and equipment shall include,
but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are
essential or necessary for the purpose of producing a broadcast signal or is
such that the failure of the electricity would cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by
a religious organization that is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code, and used
exclusively for religious purposes, and all sales of tangible personal
property or services purchased by a contractor for the purpose of
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such organization that would be
exempt from taxation under the provisions of this section if purchased
directly by such organization. Nothing in this subsection shall be deemed
to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any such organization.
When any such organization shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
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whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be so incorporated in the building or other project
reported and paid by such contractor to the director of taxation not later
than the 20
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day of the month following the close of the month in which it
shall be determined that such materials will not be used for the purpose for
which such certificate was issued, such organization concerned shall be
liable for tax on all materials purchased for the project, and upon payment
thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto.
Sales tax paid on and after July 1, 1998, but prior to the effective date of
this act upon the gross receipts received from any sale exempted by the
amendatory provisions of this subsection shall be refunded. Each claim for
a sales tax refund shall be verified and submitted to the director of taxation
upon forms furnished by the director and shall be accompanied by any
additional documentation required by the director. The director shall
review each claim and shall refund that amount of sales tax paid as
determined under the provisions of this subsection. All refunds shall be
paid from the sales tax refund fund upon warrants of the director of
accounts and reports pursuant to vouchers approved by the director or the
director's designee;
(bbb) all sales of food for human consumption by an organization that
is exempt from federal income taxation pursuant to section 501(c)(3) of
the federal internal revenue code of 1986, pursuant to a food distribution
program that offers such food at a price below cost in exchange for the
performance of community service by the purchaser thereof;
(ccc) on and after July 1, 1999, all sales of tangible personal property
and services purchased by a primary care clinic or health center the
primary purpose of which is to provide services to medically underserved
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individuals and families, and that is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code, and all
sales of tangible personal property or services purchased by a contractor
for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any such clinic
or center that would be exempt from taxation under the provisions of this
section if purchased directly by such clinic or center, except that for
taxable years commencing after December 31, 2013, this subsection shall
not apply to any sales of such tangible personal property and services
purchased by a primary care clinic or health center which performs any
abortion, as defined in K.S.A. 65-6701, and amendments thereto. Nothing
in this subsection shall be deemed to exempt the purchase of any
construction machinery, equipment or tools used in the constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for any such clinic or center. When any such clinic or
center shall contract for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to such clinic or center concerned a
sworn statement, on a form to be provided by the director of taxation, that
all purchases so made were entitled to exemption under this subsection.
All invoices shall be held by the contractor for a period of five years and
shall be subject to audit by the director of taxation. If any materials
purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or
the sales or compensating tax otherwise imposed upon such materials that
will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20
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day of the month following the close of the month in which it shall be
determined that such materials will not be used for the purpose for which
such certificate was issued, such clinic or center concerned shall be liable
for tax on all materials purchased for the project, and upon payment
thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
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of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(ddd) on and after January 1, 1999, and before January 1, 2000, all
sales of materials and services purchased by any class II or III railroad as
classified by the federal surface transportation board for the construction,
renovation, repair or replacement of class II or III railroad track and
facilities used directly in interstate commerce. In the event any such track
or facility for which materials and services were purchased sales tax
exempt is not operational for five years succeeding the allowance of such
exemption, the total amount of sales tax that would have been payable
except for the operation of this subsection shall be recouped in accordance
with rules and regulations adopted for such purpose by the secretary of
revenue;
(eee) on and after January 1, 1999, and before January 1, 2001, all
sales of materials and services purchased for the original construction,
reconstruction, repair or replacement of grain storage facilities, including
railroad sidings providing access thereto;
(fff) all sales of material handling equipment, racking systems and
other related machinery and equipment that is used for the handling,
movement or storage of tangible personal property in a warehouse or
distribution facility in this state; all sales of installation, repair and
maintenance services performed on such machinery and equipment; and
all sales of repair and replacement parts for such machinery and
equipment. For purposes of this subsection, a warehouse or distribution
facility means a single, fixed location that consists of buildings or
structures in a contiguous area where storage or distribution operations are
conducted that are separate and apart from the business' retail operations,
if any, and that do not otherwise qualify for exemption as occurring at a
manufacturing or processing plant or facility. Material handling and
storage equipment shall include aeration, dust control, cleaning, handling
and other such equipment that is used in a public grain warehouse or other
commercial grain storage facility, whether used for grain handling, grain
storage, grain refining or processing, or other grain treatment operation;
(ggg) all sales of tangible personal property and services purchased
by or on behalf of the Kansas academy of science, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, and used solely by such academy for the
preparation, publication and dissemination of education materials;
(hhh) all sales of tangible personal property and services purchased
by or on behalf of all domestic violence shelters that are member agencies
of the Kansas coalition against sexual and domestic violence;
(iii) all sales of personal property and services purchased by an
organization that is exempt from federal income taxation pursuant to
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section 501(c)(3) of the federal internal revenue code of 1986, and such
personal property and services are used by any such organization in the
collection, storage and distribution of food products to nonprofit
organizations that distribute such food products to persons pursuant to a
food distribution program on a charitable basis without fee or charge, and
all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities used
for the collection and storage of such food products for any such
organization which is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, that would
be exempt from taxation under the provisions of this section if purchased
directly by such organization. Nothing in this subsection shall be deemed
to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any such organization.
When any such organization shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in such facilities or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials that will
not be so incorporated in such facilities reported and paid by such
contractor to the director of taxation not later than the 20
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day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, such organization concerned shall be liable for tax
on all materials purchased for the project, and upon payment thereof it
may recover the same from the contractor together with reasonable
attorney fees. Any contractor or any agent, employee or subcontractor
thereof, who shall use or otherwise dispose of any materials purchased
under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax
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otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for
in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and after
July 1, 2005, but prior to the effective date of this act upon the gross
receipts received from any sale exempted by the amendatory provisions of
this subsection shall be refunded. Each claim for a sales tax refund shall be
verified and submitted to the director of taxation upon forms furnished by
the director and shall be accompanied by any additional documentation
required by the director. The director shall review each claim and shall
refund that amount of sales tax paid as determined under the provisions of
this subsection. All refunds shall be paid from the sales tax refund fund
upon warrants of the director of accounts and reports pursuant to vouchers
approved by the director or the director's designee;
(jjj) all sales of dietary supplements dispensed pursuant to a
prescription order by a licensed practitioner or a mid-level practitioner as
defined by K.S.A. 65-1626, and amendments thereto. As used in this
subsection, "dietary supplement" means any product, other than tobacco,
intended to supplement the diet that: (1) Contains one or more of the
following dietary ingredients: A vitamin, a mineral, an herb or other
botanical, an amino acid, a dietary substance for use by humans to
supplement the diet by increasing the total dietary intake or a concentrate,
metabolite, constituent, extract or combination of any such ingredient; (2)
is intended for ingestion in tablet, capsule, powder, softgel, gelcap or
liquid form, or if not intended for ingestion, in such a form, is not
represented as conventional food and is not represented for use as a sole
item of a meal or of the diet; and (3) is required to be labeled as a dietary
supplement, identifiable by the supplemental facts box found on the label
and as required pursuant to 21 C.F.R. § 101.36;
(lll) all sales of tangible personal property and services purchased by
special olympics Kansas, inc. for the purpose of providing year-round
sports training and athletic competition in a variety of olympic-type sports
for individuals with intellectual disabilities by giving them continuing
opportunities to develop physical fitness, demonstrate courage, experience
joy and participate in a sharing of gifts, skills and friendship with their
families, other special olympics athletes and the community, and activities
provided or sponsored by such organization, and all sales of tangible
personal property by or on behalf of any such organization;
(mmm) all sales of tangible personal property purchased by or on
behalf of the Marillac center, inc., which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing psycho-social-biological and special
education services to children, and all sales of any such property by or on
behalf of such organization for such purpose;
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(nnn) all sales of tangible personal property and services purchased
by the west Sedgwick county-sunrise rotary club and sunrise charitable
fund for the purpose of constructing a boundless playground which is an
integrated, barrier free and developmentally advantageous play
environment for children of all abilities and disabilities;
(ooo) all sales of tangible personal property by or on behalf of a
public library serving the general public and supported in whole or in part
with tax money or a not-for-profit organization whose purpose is to raise
funds for or provide services or other benefits to any such public library;
(ppp) all sales of tangible personal property and services purchased
by or on behalf of a homeless shelter that is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal income tax code of
1986, and used by any such homeless shelter to provide emergency and
transitional housing for individuals and families experiencing
homelessness, and all sales of any such property by or on behalf of any
such homeless shelter for any such purpose;
(qqq) all sales of tangible personal property and services purchased
by TLC for children and families, inc., hereinafter referred to as TLC,
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and such property and
services are used for the purpose of providing emergency shelter and
treatment for abused and neglected children as well as meeting additional
critical needs for children, juveniles and family, and all sales of any such
property by or on behalf of TLC for any such purpose; and all sales of
tangible personal property or services purchased by a contractor for the
purpose of constructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for the operation of services for TLC for any such
purpose that would be exempt from taxation under the provisions of this
section if purchased directly by TLC. Nothing in this subsection shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities for TLC. When TLC contracts for
the purpose of constructing, maintaining, repairing, enlarging, furnishing
or remodeling such facilities, it shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to TLC a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
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be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the
building or other project or not to have been returned for credit or the sales
or compensating tax otherwise imposed upon such materials that will not
be so incorporated in the building or other project reported and paid by
such contractor to the director of taxation not later than the 20
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day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, TLC shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the
same from the contractor together with reasonable attorney fees. Any
contractor or any agent, employee or subcontractor thereof, who shall use
or otherwise dispose of any materials purchased under such a certificate
for any purpose other than that for which such a certificate is issued
without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(rrr) all sales of tangible personal property and services purchased by
any county law library maintained pursuant to law and sales of tangible
personal property and services purchased by an organization that would
have been exempt from taxation under the provisions of this subsection if
purchased directly by the county law library for the purpose of providing
legal resources to attorneys, judges, students and the general public, and
all sales of any such property by or on behalf of any such county law
library;
(sss) all sales of tangible personal property and services purchased by
catholic charities or youthville, hereinafter referred to as charitable family
providers, which is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, and which
such property and services are used for the purpose of providing
emergency shelter and treatment for abused and neglected children as well
as meeting additional critical needs for children, juveniles and family, and
all sales of any such property by or on behalf of charitable family
providers for any such purpose; and all sales of tangible personal property
or services purchased by a contractor for the purpose of constructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for
the operation of services for charitable family providers for any such
purpose which would be exempt from taxation under the provisions of this
section if purchased directly by charitable family providers. Nothing in
this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, maintaining,
repairing, enlarging, furnishing or remodeling such facilities for charitable
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family providers. When charitable family providers contracts for the
purpose of constructing, maintaining, repairing, enlarging, furnishing or
remodeling such facilities, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to charitable family
providers a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be so incorporated in the building or other project
reported and paid by such contractor to the director of taxation not later
than the 20
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day of the month following the close of the month in which it
shall be determined that such materials will not be used for the purpose for
which such certificate was issued, charitable family providers shall be
liable for tax on all materials purchased for the project, and upon payment
thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(ttt) all sales of tangible personal property or services purchased by a
contractor for a project for the purpose of restoring, constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling a home or facility owned by a nonprofit museum that has been
granted an exemption pursuant to subsection (qq), which such home or
facility is located in a city that has been designated as a qualified
hometown pursuant to the provisions of K.S.A. 75-5071 et seq., and
amendments thereto, and which such project is related to the purposes of
K.S.A. 75-5071 et seq., and amendments thereto, and that would be
exempt from taxation under the provisions of this section if purchased
directly by such nonprofit museum. Nothing in this subsection shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the restoring, constructing, equipping, reconstructing,
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maintaining, repairing, enlarging, furnishing or remodeling a home or
facility for any such nonprofit museum. When any such nonprofit museum
shall contract for the purpose of restoring, constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
a home or facility, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificates to all suppliers
from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon
completion of the project, the contractor shall furnish to such nonprofit
museum a sworn statement on a form to be provided by the director of
taxation that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be so incorporated in a home or facility or other
project reported and paid by such contractor to the director of taxation not
later than the 20
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day of the month following the close of the month in
which it shall be determined that such materials will not be used for the
purpose for which such certificate was issued, such nonprofit museum
shall be liable for tax on all materials purchased for the project, and upon
payment thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(uuu) all sales of tangible personal property and services purchased
by Kansas children's service league, hereinafter referred to as KCSL,
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and which such property
and services are used for the purpose of providing for the prevention and
treatment of child abuse and maltreatment as well as meeting additional
critical needs for children, juveniles and family, and all sales of any such
property by or on behalf of KCSL for any such purpose; and all sales of
tangible personal property or services purchased by a contractor for the
purpose of constructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for the operation of services for KCSL for any such
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purpose that would be exempt from taxation under the provisions of this
section if purchased directly by KCSL. Nothing in this subsection shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities for KCSL. When KCSL contracts
for the purpose of constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved,
and the contractor may purchase materials for incorporation in such
project. The contractor shall furnish the number of such certificate to all
suppliers from whom such purchases are made, and such suppliers shall
execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to KCSL a
sworn statement, on a form to be provided by the director of taxation, that
all purchases so made were entitled to exemption under this subsection.
All invoices shall be held by the contractor for a period of five years and
shall be subject to audit by the director of taxation. If any materials
purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or
the sales or compensating tax otherwise imposed upon such materials that
will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20
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day of the month following the close of the month in which it shall be
determined that such materials will not be used for the purpose for which
such certificate was issued, KCSL shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the
same from the contractor together with reasonable attorney fees. Any
contractor or any agent, employee or subcontractor thereof, who shall use
or otherwise dispose of any materials purchased under such a certificate
for any purpose other than that for which such a certificate is issued
without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(vvv) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property or services, purchased by
jazz in the woods, inc., a Kansas corporation that is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal
revenue code, for the purpose of providing jazz in the woods, an event
benefiting children-in-need and other nonprofit charities assisting such
children, and all sales of any such property by or on behalf of such
organization for such purpose;
(www) all sales of tangible personal property purchased by or on
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behalf of the Frontenac education foundation, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code, for the purpose of providing education support for
students, and all sales of any such property by or on behalf of such
organization for such purpose;
(xxx) all sales of personal property and services purchased by the
booth theatre foundation, inc., an organization, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, and which such personal property and
services are used by any such organization in the constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
of the booth theatre, and all sales of tangible personal property or services
purchased by a contractor for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
the booth theatre for such organization, that would be exempt from
taxation under the provisions of this section if purchased directly by such
organization. Nothing in this subsection shall be deemed to exempt the
purchase of any construction machinery, equipment or tools used in the
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such organization. When any
such organization shall contract for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to such organization concerned a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in such
facilities or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials that will not be
so incorporated in such facilities reported and paid by such contractor to
the director of taxation not later than the 20
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day of the month following
the close of the month in which it shall be determined that such materials
will not be used for the purpose for which such certificate was issued, such
organization concerned shall be liable for tax on all materials purchased
for the project, and upon payment thereof it may recover the same from
the contractor together with reasonable attorney fees. Any contractor or
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any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto. Sales tax paid on and after January 1, 2007, but prior
to the effective date of this act upon the gross receipts received from any
sale which would have been exempted by the provisions of this subsection
had such sale occurred after the effective date of this act shall be refunded.
Each claim for a sales tax refund shall be verified and submitted to the
director of taxation upon forms furnished by the director and shall be
accompanied by any additional documentation required by the director.
The director shall review each claim and shall refund that amount of sales
tax paid as determined under the provisions of this subsection. All refunds
shall be paid from the sales tax refund fund upon warrants of the director
of accounts and reports pursuant to vouchers approved by the director or
the director's designee;
(yyy) all sales of tangible personal property and services purchased
by TLC charities foundation, inc., hereinafter referred to as TLC charities,
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and which such property
and services are used for the purpose of encouraging private philanthropy
to further the vision, values, and goals of TLC for children and families,
inc.; and all sales of such property and services by or on behalf of TLC
charities for any such purpose and all sales of tangible personal property or
services purchased by a contractor for the purpose of constructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for
the operation of services for TLC charities for any such purpose that would
be exempt from taxation under the provisions of this section if purchased
directly by TLC charities. Nothing in this subsection shall be deemed to
exempt the purchase of any construction machinery, equipment or tools
used in the constructing, maintaining, repairing, enlarging, furnishing or
remodeling such facilities for TLC charities. When TLC charities contracts
for the purpose of constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved,
and the contractor may purchase materials for incorporation in such
project. The contractor shall furnish the number of such certificate to all
suppliers from whom such purchases are made, and such suppliers shall
execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to TLC
charities a sworn statement, on a form to be provided by the director of
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taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be incorporated into the building or other project
reported and paid by such contractor to the director of taxation not later
than the 20
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day of the month following the close of the month in which it
shall be determined that such materials will not be used for the purpose for
which such certificate was issued, TLC charities shall be liable for tax on
all materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney
fees. Any contractor or any agent, employee or subcontractor thereof, who
shall use or otherwise dispose of any materials purchased under such a
certificate for any purpose other than that for which such a certificate is
issued without the payment of the sales or compensating tax otherwise
imposed upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(zzz) all sales of tangible personal property purchased by the rotary
club of shawnee foundation, which is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
as amended, used for the purpose of providing contributions to community
service organizations and scholarships;
(aaaa) all sales of personal property and services purchased by or on
behalf of victory in the valley, inc., which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing a cancer support group and services for
persons with cancer, and all sales of any such property by or on behalf of
any such organization for any such purpose;
(bbbb) all sales of entry or participation fees, charges or tickets by
Guadalupe health foundation, which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for such organization's annual fundraising event which purpose is to
provide health care services for uninsured workers;
(cccc) all sales of tangible personal property or services purchased by
or on behalf of wayside waifs, inc., which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing such organization's annual fundraiser, an
event whose purpose is to support the care of homeless and abandoned
animals, animal adoption efforts, education programs for children and
efforts to reduce animal over-population and animal welfare services, and
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all sales of any such property, including entry or participation fees or
charges, by or on behalf of such organization for such purpose;
(dddd) all sales of tangible personal property or services purchased
by or on behalf of goodwill industries or Easter seals of Kansas, inc., both
of which are exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code, for the purpose of providing
education, training and employment opportunities for people with
disabilities and other barriers to employment;
(eeee) all sales of tangible personal property or services purchased by
or on behalf of all American beef battalion, inc., which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code, for the purpose of educating, promoting and
participating as a contact group through the beef cattle industry in order to
carry out such projects that provide support and morale to members of the
United States armed forces and military services;
(ffff) all sales of tangible personal property and services purchased by
sheltered living, inc., which is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
and which such property and services are used for the purpose of
providing residential and day services for people with developmental
disabilities or intellectual disability, or both, and all sales of any such
property by or on behalf of sheltered living, inc., for any such purpose; and
all sales of tangible personal property or services purchased by a
contractor for the purpose of rehabilitating, constructing, maintaining,
repairing, enlarging, furnishing or remodeling homes and facilities for
sheltered living, inc., for any such purpose that would be exempt from
taxation under the provisions of this section if purchased directly by
sheltered living, inc. Nothing in this subsection shall be deemed to exempt
the purchase of any construction machinery, equipment or tools used in the
constructing, maintaining, repairing, enlarging, furnishing or remodeling
such homes and facilities for sheltered living, inc. When sheltered living,
inc., contracts for the purpose of rehabilitating, constructing, maintaining,
repairing, enlarging, furnishing or remodeling such homes and facilities, it
shall obtain from the state and furnish to the contractor an exemption
certificate for the project involved, and the contractor may purchase
materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing
the number of such certificate. Upon completion of the project the
contractor shall furnish to sheltered living, inc., a sworn statement, on a
form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held
by the contractor for a period of five years and shall be subject to audit by
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the director of taxation. If any materials purchased under such a certificate
are found not to have been incorporated in the building or other project or
not to have been returned for credit or the sales or compensating tax
otherwise imposed upon such materials that will not be so incorporated in
the building or other project reported and paid by such contractor to the
director of taxation not later than the 20
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day of the month following the
close of the month in which it shall be determined that such materials will
not be used for the purpose for which such certificate was issued, sheltered
living, inc., shall be liable for tax on all materials purchased for the
project, and upon payment thereof it may recover the same from the
contractor together with reasonable attorney fees. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(gggg) all sales of game birds for which the primary purpose is use in
hunting;
(hhhh) all sales of tangible personal property or services purchased
on or after July 1, 2014, for the purpose of and in conjunction with
constructing, reconstructing, enlarging or remodeling a business identified
under the North American industry classification system (NAICS)
subsectors 1123, 1124, 112112, 112120 or 112210, and the sale and
installation of machinery and equipment purchased for installation at any
such business. The exemption provided in this subsection shall not apply
to projects that have actual total costs less than $50,000. When a person
contracts for the construction, reconstruction, enlargement or remodeling
of any such business, such person shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the
contractor may purchase materials, machinery and equipment for
incorporation in such project. The contractor shall furnish the number of
such certificates to all suppliers from whom such purchases are made, and
such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project, the contractor
shall furnish to the owner of the business a sworn statement, on a form to
be provided by the director of taxation, that all purchases so made were
entitled to exemption under this subsection. All invoices shall be held by
the contractor for a period of five years and shall be subject to audit by the
director of taxation. Any contractor or any agent, employee or
subcontractor of the contractor, who shall use or otherwise dispose of any
materials, machinery or equipment purchased under such a certificate for
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any purpose other than that for which such a certificate is issued without
the payment of the sales or compensating tax otherwise imposed thereon,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(iiii) all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for the operation of services
for Wichita children's home for any such purpose that would be exempt
from taxation under the provisions of this section if purchased directly by
Wichita children's home. Nothing in this subsection shall be deemed to
exempt the purchase of any construction machinery, equipment or tools
used in the constructing, maintaining, repairing, enlarging, furnishing or
remodeling such facilities for Wichita children's home. When Wichita
children's home contracts for the purpose of constructing, maintaining,
repairing, enlarging, furnishing or remodeling such facilities, it shall obtain
from the state and furnish to the contractor an exemption certificate for the
project involved, and the contractor may purchase materials for
incorporation in such project. The contractor shall furnish the number of
such certificate to all suppliers from whom such purchases are made, and
such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project, the contractor
shall furnish to Wichita children's home a sworn statement, on a form to be
provided by the director of taxation, that all purchases so made were
entitled to exemption under this subsection. All invoices shall be held by
the contractor for a period of five years and shall be subject to audit by the
director of taxation. If any materials purchased under such a certificate are
found not to have been incorporated in the building or other project or not
to have been returned for credit or the sales or compensating tax otherwise
imposed upon such materials that will not be so incorporated in the
building or other project reported and paid by such contractor to the
director of taxation not later than the 20
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day of the month following the
close of the month in which it shall be determined that such materials will
not be used for the purpose for which such certificate was issued, Wichita
children's home shall be liable for the tax on all materials purchased for the
project, and upon payment, it may recover the same from the contractor
together with reasonable attorney fees. Any contractor or any agent,
employee or subcontractor, who shall use or otherwise dispose of any
materials purchased under such a certificate for any purpose other than that
for which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction, shall be subject to the penalties
provided for in K.S.A. 79-3615(h), and amendments thereto;
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(jjjj) all sales of tangible personal property or services purchased by
or on behalf of the beacon, inc., that is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing those desiring help with food, shelter, clothing
and other necessities of life during times of special need;
(kkkk) all sales of tangible personal property and services purchased
by or on behalf of reaching out from within, inc., which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code, for the purpose of sponsoring self-help programs for
incarcerated persons that will enable such incarcerated persons to become
role models for non-violence while in correctional facilities and productive
family members and citizens upon return to the community;
(llll) all sales of tangible personal property and services purchased by
Gove county healthcare endowment foundation, inc., which is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, and which such property and services are
used for the purpose of constructing and equipping an airport in Quinter,
Kansas, and all sales of tangible personal property or services purchased
by a contractor for the purpose of constructing and equipping an airport in
Quinter, Kansas, for such organization, that would be exempt from
taxation under the provisions of this section if purchased directly by such
organization. Nothing in this subsection shall be deemed to exempt the
purchase of any construction machinery, equipment or tools used in the
constructing or equipping of facilities for such organization. When such
organization shall contract for the purpose of constructing or equipping an
airport in Quinter, Kansas, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project, the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in such facilities or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials that will
not be so incorporated in such facilities reported and paid by such
contractor to the director of taxation no later than the 20
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day of the month
following the close of the month in which it shall be determined that such
materials will not be used for the purpose for which such certificate was
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issued, such organization concerned shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the
same from the contractor together with reasonable attorney fees. Any
contractor or any agent, employee or subcontractor thereof, who purchased
under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax
otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for
in K.S.A. 79-3615(h), and amendments thereto. The provisions of this
subsection shall expire and have no effect on and after July 1, 2019;
(mmmm) all sales of gold or silver coins; and palladium, platinum,
gold or silver bullion. For the purposes of this subsection, "bullion" means
bars, ingots or commemorative medallions of gold, silver, platinum,
palladium, or a combination thereof, for which the value of the metal
depends on its content and not the form;
(nnnn) all sales of tangible personal property or services purchased
by friends of hospice of Jefferson county, an organization that is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, for the purpose of providing support to the
Jefferson county hospice agency in end-of-life care of Jefferson county
families, friends and neighbors, and all sales of entry or participation fees,
charges or tickets by friends of hospice of Jefferson county for such
organization's fundraising event for such purpose;
(oooo) all sales of tangible personal property or services purchased
for the purpose of and in conjunction with constructing, reconstructing,
enlarging or remodeling a qualified business facility by a qualified firm or
qualified supplier that meets the requirements established in K.S.A. 2023
Supp. 74-50,312 and, 74-50,319, section 2 and section 7, and amendments
thereto, and that has been approved for a project exemption certificate by
the secretary of commerce, and the sale and installation of machinery and
equipment purchased by such qualified firm or, qualified supplier or
qualified company for installation at any such qualified business facility.
When a person shall contract for the construction, reconstruction,
enlargement or remodeling of any such qualified business facility, such
person shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and the contractor may
purchase materials, machinery and equipment for incorporation in such
project. The contractor shall furnish the number of such certificates to all
suppliers from whom such purchases are made, and such suppliers shall
execute invoices covering the same bearing the number of such certificate.
Upon completion of the project, the contractor shall furnish to the owner
of the qualified firm or, qualified supplier or qualified company a sworn
statement, on a form to be provided by the director of taxation, that all
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purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
be subject to audit by the director of taxation. Any contractor or any agent,
employee or subcontractor thereof who shall use or otherwise dispose of
any materials, machinery or equipment purchased under such a certificate
for any purpose other than that for which such a certificate is issued
without the payment of the sales or compensating tax otherwise imposed
thereon, shall be guilty of a misdemeanor and, upon conviction therefor,
shall be subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto. As used in this subsection, "qualified business
facility," "qualified firm" and "qualified supplier" mean the same as
defined in K.S.A. 2023 Supp. 74-50,311, and amendments thereto, and
"qualified company" means the same as defined in section 1, and
amendments thereto;
(pppp) (1) all sales of tangible personal property or services
purchased by a not-for-profit corporation that is designated as an area
agency on aging by the secretary for aging and disabilities services and is
exempt from federal income taxation pursuant to section 501(c)(3) of the
federal internal revenue code for the purpose of coordinating and
providing seniors and those living with disabilities with services that
promote person-centered care, including home-delivered meals,
congregate meal settings, long-term case management, transportation,
information, assistance and other preventative and intervention services to
help service recipients remain in their homes and communities or for the
purpose of constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for such area agency on
aging; and
(2) all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for an
area agency on aging that would be exempt from taxation under the
provisions of this section if purchased directly by such area agency on
aging. Nothing in this paragraph shall be deemed to exempt the purchase
of any construction machinery, equipment or tools used in the
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for an area agency on aging. When an
area agency on aging contracts for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and such contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
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same bearing the number of such certificate. Upon completion of the
project, the contractor shall furnish to such area agency on aging a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the
building or other project or not to have been returned for credit or the sales
or compensating tax otherwise imposed upon such materials that will not
be so incorporated in the building or other project reported and paid by
such contractor to the director of taxation not later than the 20
th
day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, the area agency on aging concerned shall be liable
for tax on all materials purchased for the project, and upon payment
thereof, the area agency on aging may recover the same from the
contractor together with reasonable attorney fees. Any contractor or any
agent, employee or subcontractor thereof who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto; and
(qqqq) all sales of tangible personal property or services purchased
by Kansas suicide prevention HQ, inc., an organization that is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, for the purpose of bringing suicide
prevention training and awareness to communities across the state.
Sec. 10. K.S.A. 2023 Supp. 79-3606 is hereby repealed.
Sec. 11. This act shall take effect and be in force from and after its
publication in the statute book.
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