Kansas 2025-2026 Regular Session

Kansas House Bill HB2038 Compare Versions

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Old	New	Differences
1	1	Session of 2025
2	2	HOUSE BILL No. 2038
3	3	By Committee on Commerce, Labor and Economic Development
4	4	Requested by Stuart Little on behalf of Grow Kansas Film
5	5	1-21
6	6	AN ACT concerning economic development; enacting the Kansas film and
7	7	digital media production development act; establishing an income tax
8	8	credit and sales tax exemption program to be administered by the
9	9	secretary of commerce for the purpose of developing film, video or
10	10	digital production in Kansas; amending K.S.A. 2024 Supp. 79-3606
11	11	and repealing the existing section.
12	12	Be it enacted by the Legislature of the State of Kansas:
13	13	New Section 1. Sections 1 through 6, and amendments thereto, shall
14	14	be known and may be cited as the Kansas film and digital media
15	15	production development act. The purpose of the Kansas film and digital
16	16	media production development act is to incentivize film, video or digital
17	17	media productions in Kansas and facilitate the development and growth of
18	18	a film, video or digital media production industry and associated
19	19	businesses supporting the industry in this state.
20	20	New Sec. 2. As used in this act:
21	21	(a) "Above-the-line personnel" means any individual hired or credited
22	22	on screen for an eligible production for work on the production or
23	23	postproduction of film as a:
24	24	(1) Principal cast member compensated for the eligible production
25	25	project at a screen actors guild schedule f or above payment rate; or
26	26	(2) producer, screenwriter or director.
27	27	(b) "Act" means the Kansas film and digital media production
28	28	development act, sections 1 through 6, and amendments thereto.
29	29	(c) "Affiliates" means those entities that are included in the
30	30	production company's affiliated group as defined in section 1504(a) of the
31	31	internal revenue code, 26 U.S.C. § 1504(a), and all other entities that are
32	32	50% or more owned, directly or indirectly, by members of the affiliated
33	33	group.
34	34	(d) "Based in Kansas" or "Kansas-based" means, in reference to a
35	35	vendor, production company or company, that the vendor, production
36	36	company or company is subject to income tax liability under the Kansas
37	37	income tax act and has a physical presence in Kansas and, with respect to a
38	38	production company, has maintained a physical presence in Kansas for at
39	39	least six months prior to submitting an application to the secretary
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75	75	pursuant to section 3, and amendments thereto.
76	76	(e) "Certified production" or "certified project" means an eligible
77	77	production or project that has agreed to one or more qualified Kansas
78	78	promotions and that has been approved by the secretary as eligible for tax
79	79	incentives pursuant to the provisions of section 3, and amendments
80	80	thereto.
81	81	(f) "Crew" means any individual who works on production or
82	82	postproduction for an eligible production. "Crew" does not include above-
83	83	the-line personnel.
84	84	(g) (1) "Eligible production" or "eligible project" means a production:
85	85	(A) (i) Of a new film, video or digital project, or a portion or portions
86	86	of such project, produced in this state, including a feature film,
87	87	documentary, series, pilot, movie for television, televised commercial
88	88	advertisement, music video, video game, content-based mobile application
89	89	or a virtual reality, augmented reality, multi-media or new media project;
90	90	(ii) produced in whole or in part, in short or in long form, and may
91	91	include animation, music and green screen, motion capture and similar
92	92	production techniques;
93	93	(iii) fixed on a delivery system including, but not limited to, film
94	94	format or reels, videotape, computer drive or disc, laser disc or any
95	95	element of the digital domain, from which the program or completed
96	96	project is viewed or reproduced; and
97	97	(iv) intended for multimarket commercial distribution via theaters,
98	98	video on demand, direct to DVD, broadcast streaming, digital platforms or
99	99	electronic delivery systems designed for the distribution or playing of
100	100	interactive games, licensing for exhibition by individual television
101	101	stations, groups of stations, networks, national or regional syndication,
102	102	advertiser-supported sites, cable television stations, streaming companies
103	103	or public broadcasting stations; and
104	104	(B) that incurs or is reasonably anticipated to incur qualified
105	105	production or postproduction expenses of at least $50,000, as determined
106	106	by the secretary.
107	107	(2) "Eligible production" or "eligible project" does not include:
108	108	(A) The coverage of news or athletic events, local advertising, local
109	109	interest programming, instructional videos, corporate videos, any project
110	110	that is not intended for multimarket commercial distribution or any portion
111	111	of a project not shot, recorded or created in Kansas; and
112	112	(B) any production of obscene material or an obscene performance as
113	113	defined in K.S.A. 21-6401, and amendments thereto.
114	114	(3) For purposes of the income tax credit as allowed under section
115	115	4(f), and amendments thereto, "eligible production" or "eligible project"
116	116	means the same as defined in paragraphs (1) and (2), except that a
117	117	production not intended for multimarket commercial distribution may be
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161	161	included and the amount of eligible expenses required shall be at least
162	162	$25,000.
163	163	(h) "Eligible television series" means a certified series television
164	164	production project intended for multimarket commercial distribution, with
165	165	an order for multiple episodes in a single season, not less than 25% of the
166	166	series season is filmed within Kansas and the production incurs qualifying
167	167	eligible expenses of more than $50,000.
168	168	(i) "Eligible wages and salaries" means:
169	169	(1) (A) Wages or salaries paid by the production company to crew for
170	170	work in Kansas designated as for production or for postproduction of an
171	171	eligible production;
172	172	(B) the production company is required to remit withholding
173	173	payments for such wages or salaries to the department of revenue under
174	174	the Kansas withholding and declaration of estimated tax act; and
175	175	(C) at least 10% of the crew are residents of this state. The secretary
176	176	and the Kansas arts industry director may agree upon a higher percentage
177	177	requirement for Kansas residency of the crew; and
178	178	(2) the amounts of wages, salaries or payments paid to above-the-line
179	179	personnel, except that the eligible amount of such wages, salaries or
180	180	payments shall not comprise more than 25% of total qualified production
181	181	expenditures.
182	182	(j) "Film" means a professional single media, multimedia, video or
183	183	audiovisual program or feature, that may be digital, that is not obscene
184	184	material or an obscene performance as defined in K.S.A. 21-6401, and
185	185	amendments thereto. "Film" includes, but is not limited to, film produced
186	186	for an interactive game or a documentary, special, music video, television
187	187	commercial or television program, or a portion thereof, that is filmed or
188	188	taped for cable, television, streaming network, national or regional
189	189	syndication or for a feature-length motion picture intended for theatrical
190	190	release or for network, streaming, national or regional syndication or
191	191	broadcast.
192	192	(k) "High-impact production" means a certified production for which
193	193	production or postproduction expenditures are at least $50,000,000, and at
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196	196	/3 of such total expenditures constitute qualified expenditures
197	197	approved by the secretary.
198	198	(l) "Kansas film media industry development expenditure" means
199	199	documented financial, promotional or in-kind contributions or educational
200	200	or workforce development efforts, at standard rates set by the secretary in
201	201	consultation with the Kansas creative arts industries commission, in
202	202	partnership with related Kansas industry labor organizations or educational
203	203	institutions, toward the furtherance of the Kansas film or digital media
204	204	industry. Promotional efforts include, but are not limited to, the promotion
205	205	of the Kansas industry by directors, actors or producers affiliated with the
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249	249	production company's project through social media that is managed by the
250	250	state, radio or television interviews facilitated by the department of
251	251	commerce, enhanced screen credit acknowledgments or related events that
252	252	are facilitated, conducted or sponsored by the secretary or the Kansas
253	253	creative arts industries commission.
254	254	(m) "Multi-film deal" means a certified project in which a production
255	255	company films at least 75% of main crew principal photography for three
256	256	or more films in this state within five years.
257	257	(n) "Nonresident crew member" means an individual who is not a
258	258	Kansas resident and is hired for work on an eligible production project
259	259	within this state.
260	260	(o) "Production company" means a person, producer or company that
261	261	produces film, including, but not limited to, for exhibition in theaters,
262	262	television, interactive games, cable, syndication or streaming networks.
263	263	"Production company" includes affiliates of a production company when
264	264	approved by the secretary and identified in the agreement executed
265	265	pursuant to section 3, and amendments thereto.
266	266	(p) (1) "Postproduction expenditures" means expenditures made in
267	267	Kansas directly for postproduction activities in Kansas for an eligible
268	268	production by a production company, including, but not limited to, the
269	269	following categories:
270	270	(A) Eligible wages or salaries of above-the-line personnel or crew
271	271	designated as postproduction;
272	272	(B) sound synchronization, recording or mixing;
273	273	(C) color grading;
274	274	(D) editing and related services;
275	275	(E) visual effects or special effects;
276	276	(F) computer graphics, special effects or animation services;
277	277	(G) film processing or format transfers;
278	278	(H) music production, recording, mixing or composition;
279	279	(I) licensing of music produced in this state or created by a Kansas
280	280	resident;
281	281	(J) rental of facilities or equipment;
282	282	(K) leasing of vehicles, including, but not limited to, leasing of
283	283	airplanes, for postproduction-related transportation and costs of food and
284	284	lodging; and
285	285	(L) other direct postproduction costs of an eligible production in
286	286	accordance with generally accepted entertainment industry practices.
287	287	(2) "Postproduction expenditures" does not include:
288	288	(A) Goods, equipment or vehicles not purchased, rented or leased in
289	289	Kansas from a Kansas-based vendor and when not used in Kansas;
290	290	(B) any expenditures for activities, work or services not conducted in
291	291	Kansas and not performed by a Kansas-based vendor. A vendor that acts as
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335	335	a conduit to enable purchases, rentals or leases to qualify as "production
336	336	expenditures" that would not otherwise qualify shall not be considered a
337	337	Kansas-based vendor with respect to such purchases, rentals or leases; or
338	338	(C) costs for footage shot outside this state, marketing, story rights or
339	339	distribution.
340	340	(q) (1) "Production expenditures" means expenditures made in
341	341	Kansas directly related to or used for production activities in this state for
342	342	an eligible production by a production company, including, but not limited
343	343	to, the following categories:
344	344	(A) Eligible wages or salaries of above-the-line personnel or crew
345	345	designated as production;
346	346	(B) set construction, maintenance, repair or modification, set
347	347	furnishings and operations, wardrobe, make-up, materials used to construct
348	348	costumes, props or scenery, accessories and related services;
349	349	(C) scripts, musical scores or storyboards and drafting and design
350	350	supplies;
351	351	(D) photography, sound synchronization, lighting and related
352	352	services;
353	353	(E) editing and related services;
354	354	(F) rental of buildings, facilities or equipment and leasing of vehicles,
355	355	including, but not limited to, leasing of airplanes;
356	356	(G) transportation costs, including, but not limited to, leasing of
357	357	vehicles or airplanes, directly related to production activities in Kansas;
358	358	(H) food and lodging;
359	359	(I) sound recording or mixing services;
360	360	(J) computer graphics, special effects and animation services;
361	361	(K) film processing or format transfers;
362	362	(L) airfare if purchased through a Kansas travel agency;
363	363	(M) insurance costs and bonding if purchased through a Kansas
364	364	insurance agency; and
365	365	(N) other direct costs of producing film in accordance with generally
366	366	accepted entertainment industry practices.
367	367	(2) "Production expenditures" does not include:
368	368	(A) Goods, equipment or vehicles not purchased, rented or leased in
369	369	Kansas from a Kansas-based vendor;
370	370	(B) any expenditures for activities, work or services not conducted in
371	371	Kansas and services not performed at the filming site unless the vendor is
372	372	a Kansas-based vendor; and
373	373	(C) postproduction expenditures as defined in subsection (p) when
374	374	used for postproduction activities.
375	375	(r) "Qualified postproduction expenditures" means the funds actually
376	376	invested and expended by a production company that are postproduction
377	377	expenditures made in this state and that are directly used in a certified
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421	421	production, including, but not limited to, any Kansas film media industry
422	422	development expenditures, and approved by the secretary. "Qualified
423	423	postproduction expenditures" shall not exceed the usual and customary
424	424	cost of the goods or services acquired. The secretary or the secretary of
425	425	revenue may determine the value of the goods or services for purposes of
426	426	this section when the buyer and seller are affiliates, or the sale or purchase
427	427	is not an arm's length transaction. "Qualified postproduction expenditures"
428	428	does not include postproduction expenditures for which another taxpayer
429	429	claims the production tax credit pursuant to section 4, and amendments
430	430	thereto.
431	431	(s) "Qualified production expenditures" means the funds actually
432	432	invested and expended by a production company that are production
433	433	expenditures made in this state and directly used in a certified production,
434	434	including any Kansas film media industry development expenditures, and
435	435	approved by the secretary. "Qualified production expenditures" shall not
436	436	exceed the usual and customary cost of the goods or services acquired. The
437	437	secretary or the secretary of revenue may determine the value of the goods
438	438	or services for purposes of this act when the buyer and seller are affiliates,
439	439	or the sale or purchase is not an arm's length transaction. "Qualified
440	440	production expenditures" does not include production expenditures for
441	441	which another taxpayer claims the production tax credit pursuant to
442	442	section 4, and amendments thereto. "Qualified production expenditures"
443	443	does not include wages, salaries or payment paid to above-the-line
444	444	personnel that constitute more than 25% of total production expenditures.
445	445	(t) "Qualified Kansas promotion" means a promotion of this state,
446	446	approved by the secretary as to content, distribution, duration and
447	447	placement within a production, video or interactive game or in associated
448	448	online or other promotions, that consists of a static or animated logo that
449	449	promotes Kansas, an embedded Kansas promotion or a Kansas
450	450	advertisement and that may include a link to a Kansas website.
451	451	(u) "Secretary" means the secretary of commerce.
452	452	(v) "Vendor" means a business that sells or leases goods or services
453	453	that are related to standard production industry inventory or services.
454	454	"Vendor" does not include a personal services business.
455	455	New Sec. 3. (a) There is hereby created the Kansas film and digital
456	456	media industry development program. The purpose of the Kansas film and
457	457	digital media industry development program is to:
458	458	(1) Provide tax incentives for eligible projects produced in Kansas by
459	459	production companies that meet the requirements of this act and are
460	460	approved as certified projects by the secretary of commerce; and
461	461	(2) provide tax incentives, support programs or services, including,
462	462	but not limited to, professional development, infrastructure investments
463	463	and marketing efforts to develop film and digital media industry-related
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507	507	Kansas businesses.
508	508	(b) (1) The program shall be administered by the secretary. The
509	509	secretary shall consult with the Kansas creative arts industries commission
510	510	in administering this act to ensure the best possible use of Kansas
511	511	resources for promoting and developing film and digital media production
512	512	and related industry in Kansas.
513	513	(2) In determining whether to approve a project as a certified project,
514	514	the secretary shall consider the immediate impact and potential future
515	515	impact of the project on the development and growth of the Kansas film,
516	516	video and digital media production industry. The secretary may limit, by
517	517	category, specified eligible expenditures or total amounts of eligible
518	518	production or postproduction expenditures that may be approved by the
519	519	secretary as qualified production or postproduction expenditures.
520	520	(3) The aggregate total amount of income tax credits awarded in a tax
521	521	year pursuant to this act shall not exceed the amount specified in section 4,
522	522	and amendments thereto. The secretary shall designate the percentage
523	523	specified in section 4, and amendments thereto, of such aggregate total
524	524	amount in each tax year for tax credits for Kansas-based production
525	525	companies to fulfill the purpose of this act as described in subsection (a)
526	526	(2).
527	527	(c) To be eligible for an income tax credit or a sales tax exemption
528	528	pursuant to section 4, and amendments thereto, subsection (e) and section
529	529	7, and amendments thereto, respectively, a production company shall, prior
530	530	to the commencement of the project or of principal photography, submit
531	531	the following to the secretary in the form and manner and with such
532	532	documentation and other information as required by the secretary:
533	533	(1) An application for approval of the production as an eligible
534	534	production and for designation as a certified production;
535	535	(2) evidence of adequate financing for the project;
536	536	(3) evidence of a certificate of general liability insurance with a
537	537	minimum coverage of $1,000,000, or a greater amount if required by the
538	538	secretary, and workers compensation coverage in compliance with Kansas
539	539	law that shall include coverage of employer liability;
540	540	(4) a description of the project, timelines and anticipated completion
541	541	dates, anticipated eligible expenditures and project activities to be
542	542	conducted in Kansas, anticipated employment of crew or above-the-line
543	543	personnel who are Kansas residents, use of Kansas-based vendors and any
544	544	anticipated construction or contribution of production infrastructure or
545	545	participation in Kansas film and digital media industry development
546	546	activities; and
547	547	(5) an economic impact statement showing the estimated economic
548	548	impact of the project. Such economic impact statement shall indicate the
549	549	impact on the region of the state in which the project production or
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593	593	production-related activities are conducted and any impact on the state as a
594	594	whole. The economic impact statement shall be prepared at the applicant's
595	595	expense by a firm and in the manner approved by the secretary. The
596	596	secretary may consider the size of the project when determining the scope
597	597	and information required.
598	598	(d) (1) If the secretary determines that the project is an eligible
599	599	project and approves the application, the production company shall enter
600	600	into an agreement with the secretary prior to the commencement of the
601	601	project on such terms and conditions as the secretary may require. Such
602	602	terms and conditions shall include, but not be limited to, qualified Kansas
603	603	promotions to be provided and any limitations the secretary may impose
604	604	on the amounts of eligible production or postproduction expenditures that
605	605	may be approved by the secretary as qualified expenditures, whether in
606	606	total or for specified eligible expenditures or specified eligible expenditure
607	607	categories.
608	608	(2) The production company shall agree to the provision of
609	609	documentation and information to the secretary or the secretary of revenue
610	610	on a regular basis as requested by the secretary or secretary of revenue to
611	611	determine qualified production or postproduction expenditures,
612	612	compliance with the requirements of this act or rules and regulations
613	613	adopted by the secretary or the secretary of revenue and the progress of the
614	614	project and estimated completion date.
615	615	(3) The terms and conditions shall include, but not be limited to,
616	616	provisions:
617	617	(A) For waiver of any income tax credits or sales tax exemptions
618	618	authorized pursuant to this act but not received by a production company,
619	619	termination of any future tax credits or exemptions pursuant to this act and
620	620	repayment of income tax credits received or sales tax exempted if
621	621	requirements of this act or rules and regulations are not met or terms of the
622	622	agreement are breached by the production company;
623	623	(B) requiring cooperation with any audit conducted pursuant to this
624	624	act; and
625	625	(C) for submission of information as required for publication on the
626	626	Kansas economic incentive database and for the secretary's reports to the
627	627	legislature as provided by section 5, and amendments thereto.
628	628	(4) The terms and conditions may also include agreements by the
629	629	production company for the facilitation of, coordination with or provision
630	630	of support services for Kansas businesses and organizations to enable
631	631	participation in the project or the development of the Kansas film and
632	632	digital media industry.
633	633	(5) If the secretary approves the agreement with the production
634	634	company, the secretary shall authorize the eligible project as a certified
635	635	project.
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679	679	(e) Upon approval by the secretary as an eligible and certified project
680	680	and the execution of the agreement as provided in subsection (d), the
681	681	secretary may approve an application by the production company for a
682	682	sales tax exemption for production or postproduction expenditures
683	683	pursuant to the provisions of K.S.A. 79-3606(xxxx), and amendments
684	684	thereto, and shall notify the applicant and the secretary of revenue of such
685	685	approval. In considering approval of such sales tax exemption, the
686	686	secretary shall prioritize expenditures in rural areas or in economically
687	687	depressed urban areas to the extent feasible. The secretary may require that
688	688	all or a portion of expenditures eligible for exemption from sales tax be
689	689	made with businesses located in such areas. A production company
690	690	receiving a sales tax exemption shall provide the secretary or the secretary
691	691	of revenue with such documentation as requested by the secretary or the
692	692	secretary of revenue to demonstrate that expenditures have been made as
693	693	required.
694	694	(f) Prior to receipt by a production company of any income tax credit
695	695	authorized by section 4, and amendments thereto, the secretary shall
696	696	examine and determine the amount of eligible production or eligible
697	697	postproduction expenditures that are qualified production expenditures or
698	698	qualified postproduction expenditures of the production company and that
699	699	such expenditures are for a certified production. No expenditure that was
700	700	exempt from sales taxation pursuant to K.S.A. 79-3606(xxxx), and
701	701	amendments thereto, shall also be a basis for the income tax credit
702	702	pursuant to section 4, and amendments thereto, unless specifically
703	703	approved by the secretary. The production company shall provide such
704	704	information and documentation as requested by the secretary to enable the
705	705	secretary to determine if expenditures are authorized and whether both
706	706	exempted from sales tax and utilized as a basis for such income tax credit.
707	707	In addition, the production company shall provide evidence as required by
708	708	the secretary that:
709	709	(1) The production company has filed all Kansas tax returns and tax
710	710	documents required by law and withholding taxes have been submitted as
711	711	required by law;
712	712	(2) all crew who are Kansas residents and Kansas-based vendors have
713	713	been paid and that there are no pending liens in this state against the
714	714	production company; and
715	715	(3) the certified project for which a sales tax exemption has been
716	716	granted or an income tax credit is requested has been completed, or in the
717	717	discretion of the secretary, a phase of the certified project has been
718	718	completed and adequate assurance, as determined by the secretary, has
719	719	been provided that the project will be fully completed.
720	720	(g) As a condition of receiving any income tax credits pursuant to this
721	721	act, the production company shall provide the secretary with a report by a
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765	765	certified public accountant licensed to practice in Kansas, prepared at the
766	766	expense of the applicant, verifying that the expenditures have been made
767	767	in compliance with the requirements of this act. The report shall be
768	768	provided with a claim for income tax credits as required by section 4, and
769	769	amendments thereto, and as otherwise required by the secretary.
770	770	(h) The secretary shall notify the production company and the
771	771	secretary of revenue of determinations of qualified expenditures made by
772	772	the secretary. The secretary shall notify the secretary of revenue if the
773	773	secretary disqualifies the production company for tax credits or
774	774	exemptions or requires repayment of such tax benefits pursuant to the
775	775	provisions of this act.
776	776	(i) Any repayment of income tax credits or sales or use tax
777	777	exemptions by a production company pursuant to this act shall be made to
778	778	the secretary. The secretary shall remit all moneys received from such
779	779	repayments to the state treasurer in accordance with the provisions of
780	780	K.S.A. 75-4215, and amendments thereto. Upon receipt of each such
781	781	remittance, the state treasurer shall deposit the entire amount in the state
782	782	treasury to the credit of the state general fund.
783	783	(j) The secretary and the secretary of revenue may adopt rules and
784	784	regulations to implement the provisions of this act.
785	785	New Sec. 4. (a) For tax years 2025 through 2034, for any production
786	786	company or its affiliates that make qualified production or qualified
787	787	postproduction expenditures for a certified production approved by the
788	788	secretary of commerce as provided by section 3, and amendments thereto,
789	789	there shall be allowed an income tax credit against the tax imposed under
790	790	the Kansas income tax act based on the certified production company's
791	791	qualified expenditures as determined pursuant to subsection (d) and as
792	792	limited by subsection (h). The tax credit shall be applied against the
793	793	production company's income tax liability for the taxable year in which the
794	794	qualified expenditures are made by the production company. If the amount
795	795	of the tax credit allowed exceeds the production company's income tax
796	796	liability for the taxable year, the production company may carry over the
797	797	amount of the tax credit that exceeds such tax liability for deduction from
798	798	the production company's income tax liability in the next succeeding
799	799	taxable year or years until the total amount of the tax credit has been
800	800	deducted from the production company's tax liability, except that no such
801	801	tax credit shall be carried over for deduction after the 10
802	802	th
803	803	taxable year
804	804	succeeding the year in which the applicable qualified expenditures were
805	805	made by the production company. If the production company is a
806	806	corporation having an election in effect under subchapter S of the federal
807	807	internal revenue code, a partnership or a limited liability company, the
808	808	credit shall be claimed by the shareholders of such corporation, the
809	809	partners of such partnership or members of such limited liability company
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853	853	in the same manner as such shareholders, partners or members account for
854	854	their proportionate shares of the income or loss of the corporation,
855	855	partnership or limited liability company and in accordance with the
856	856	agreement executed pursuant to section 3, and amendments thereto. The
857	857	tax credit may be transferred as provided by subsection (k).
858	858	(b) A claim for a tax credit shall be filed with the secretary of revenue
859	859	as part of a return filed by the production company pursuant to the Kansas
860	860	income tax act. The order that agreements are executed with the secretary
861	861	of commerce pursuant to section 3, and amendments thereto, shall
862	862	determine the order that tax credits are allocated by the secretary of
863	863	revenue. A claim shall be submitted with a return or amended return within
864	864	one calendar year of the date of the last eligible production expenditure or
865	865	the last eligible postproduction expenditure for the certified production
866	866	that would be eligible for an income tax credit as provided by subsection
867	867	(a). A request or requests by a production company for an extension of
868	868	time to submit a claim shall be granted by the secretary of revenue not to
869	869	exceed a total time extension of six months. All qualified production
870	870	expenditures or postproduction expenditures incurred during the taxable
871	871	year by a production company for a certified production shall be submitted
872	872	for credit as part of the same income tax return. A tax credit claim for
873	873	qualified expenditures during a taxable year shall not be divided and
874	874	submitted with multiple returns or in multiple years.
875	875	(c) The claim shall include a copy of the project certification and the
876	876	determination of qualified production or postproduction expenditures by
877	877	the secretary of commerce. The claim shall also include a report by a
878	878	certified public accountant licensed to practice in Kansas, prepared at the
879	879	expense of the applicant, verifying that the expenditures have been made
880	880	in compliance with the requirements of this act.
881	881	(d) The amount of the tax credit shall be equal to 30% of:
882	882	(1) The qualified production expenditures for the certified project; or
883	883	(2) the qualified postproduction expenditures for a certified project
884	884	with no qualified production expenditures.
885	885	(e) The secretary of commerce may approve additional credits as
886	886	follows:
887	887	(1) In addition to the amount authorized by subsection (d)(1):
888	888	(A) Up to 5% of the qualified production expenditures for a certified
889	889	multi-film deal, a certified eligible television series, a certified high-impact
890	890	production or contributions to film-related infrastructure or workforce
891	891	development in Kansas, including, but not limited to, contributions to
892	892	permanent sets, sound stages, film editing facilities, computer graphics,
893	893	special effects or animation facilities, educational facilities or programs,
894	894	internships or apprenticeships or equipment for production activities, in
895	895	the amount such contributions are approved by the secretary; or
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938	938	43 HB 2038 12
939	939	(B) up to 5% for qualified production expenditures for a production if
940	940	50% or more of the crew or above-the-line personnel are Kansas residents;
941	941	or
942	942	(2) in addition to the amount authorized under subsection (d)(1) or
943	943	(2), up to an additional 5% of the amount of the qualified production
944	944	expenditures or qualified postproduction expenditures, as applicable, of a
945	945	certified project of a production company that has previously received an
946	946	income tax credit under this act with respect to such certified project.
947	947	(f) In addition to or in lieu of the credits authorized by subsection (d),
948	948	as determined by the secretary, a Kansas-based production company that
949	949	incurs at least $25,000 in qualified production or postproduction
950	950	expenditures, including, but not limited to, expenditures for a certified
951	951	production not intended for multimarket distribution but that otherwise
952	952	constitute qualified expenditures and meets all other qualifications for a
953	953	tax credit under this act shall receive a tax credit in the amount of 25% of
954	954	such qualified expenditures. The tax credit shall be applied against the
955	955	Kansas-based production company's income tax liability for the taxable
956	956	year in which the qualified expenditures are made by the Kansas-based
957	957	production company. If the amount of the tax credit exceeds the Kansas-
958	958	based production company's income tax liability, the Kansas-based
959	959	production company may carry over the amount of the tax credit that
960	960	exceeds such tax liability for deduction from the Kansas-based production
961	961	company's income tax liability in the next succeeding taxable year or years
962	962	until the total amount of the tax credit has been deducted from the Kansas-
963	963	based production company's tax liability, except that no such tax credit
964	964	shall be carried over for deduction after the 10
965	965	th
966	966	taxable year succeeding
967	967	the year in which the applicable qualified expenditures were made by the
968	968	Kansas-based production company. If the Kansas-based production
969	969	company is a corporation having an election in effect under subchapter S
970	970	of the federal internal revenue code, a partnership or a limited liability
971	971	company, the credit shall be claimed by the shareholders of such
972	972	corporation, the partners of such partnership or members of such limited
973	973	liability company in the same manner as such shareholders, partners or
974	974	members account for their proportionate shares of the income or loss of
975	975	the corporation, partnership or limited liability company and in accordance
976	976	with the agreement executed pursuant to section 3, and amendments
977	977	thereto. The tax credit may be transferred as provided by subsection (k).
978	978	(g) The amount of a tax credit or portion thereof based on a qualified
979	979	production or postproduction expenditure for a nonresident, above-the-line
980	980	individual shall be limited to not more than $500,000 in each taxable year.
981	981	(h) The maximum cumulative amount of all income tax credits
982	982	awarded to a production company for a certified project for a taxable year
983	983	shall not exceed 40% of the total qualified production expenditures or
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1027	1027	qualified postproduction expenditures made by the production company
1028	1028	for that certified project during that taxable year.
1029	1029	(i) For purposes of determining the payment of credit claims pursuant
1030	1030	to this section, the secretary of revenue may require that credit claims of
1031	1031	affiliates be combined into one claim if necessary to accurately reflect
1032	1032	closely integrated activities of affiliates.
1033	1033	(j) If a production company hires another production company to
1034	1034	produce a project or contribute elements of a project for pay, the hired
1035	1035	company shall be considered a service provider for the hiring company,
1036	1036	and the hiring company shall be entitled to the income tax credit
1037	1037	authorized by this section.
1038	1038	(k) A tax credit allowed pursuant to this section may be transferred, in
1039	1039	whole or in part, by the production company or, if applicable as provided
1040	1040	by subsection (a), a shareholder, partner or member, to one or more
1041	1041	transferees. The transferor shall provide notification and documentation of
1042	1042	the transfer or transfers with the transferor's claim for a tax credit pursuant
1043	1043	to subsection (b). Such claim shall be filed with the secretary of revenue in
1044	1044	such form and manner and with all information as may be required by the
1045	1045	secretary of revenue, including, but not limited to, all information
1046	1046	requested regarding the transferee. The transferor shall make the transfer
1047	1047	within the calendar year in which the transferor's claim is made to the
1048	1048	secretary of revenue. The credit shall only be transferred once. The
1049	1049	transferor may transfer the credit to any individual or entity subject to
1050	1050	income tax under the Kansas income tax act. The transferred credit shall
1051	1051	be claimed by the transferee against the transferee's Kansas income tax
1052	1052	liability in the taxable year the credit was transferred. The amount of the
1053	1053	transferred credit that exceeds the transferee's tax liability for such year
1054	1054	may be carried over for deduction from the transferee's income tax liability
1055	1055	in the next succeeding taxable year or years until the total amount of the
1056	1056	tax credit has been deducted from the transferee's tax liability, except that
1057	1057	no such tax credit shall be carried over for deduction after the 10
1058	1058	th
1059	1059	taxable
1060	1060	year succeeding the taxable year in which the credit was transferred to the
1061	1061	transferee. The transferor or transferee shall provide such documentation
1062	1062	of the transfer to the secretary of revenue as may be required by the
1063	1063	secretary of revenue and at such time or times as may be required by the
1064	1064	secretary of revenue.
1065	1065	(l) The aggregate total amount of credits allowed under this section
1066	1066	shall not exceed $10,000,000 in a tax year. Ten percent of such aggregate
1067	1067	total in each tax year shall be designated by the secretary of commerce for
1068	1068	tax credits to Kansas-based production companies.
1069	1069	New Sec. 5. On or before January 31, 2026, and each January 31
1070	1070	thereafter through January 31, 2035, the secretary shall submit an annual
1071	1071	report to the house of representatives standing committees on commerce,
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1114	1114	43 HB 2038 14
1115	1115	labor and economic development and taxation and the senate standing
1116	1116	committees on commerce and assessment and taxation. The report shall
1117	1117	include the amounts and recipients of tax incentives approved by the
1118	1118	secretary pursuant to this act for the prior year and to the date of the report,
1119	1119	anticipated tax incentive amounts for the current year, the production
1120	1120	companies that have applied for and that have been certified for projects, a
1121	1121	description of ongoing and completed projects and the impact of such
1122	1122	projects and the program on the film, video or digital production industry
1123	1123	in Kansas. The secretary of revenue shall provide the secretary with
1124	1124	information as necessary for the report in accordance with the terms of the
1125	1125	agreements required by section 3, and amendments thereto.
1126	1126	New Sec. 6. No sales tax exemption or income tax credit pursuant to
1127	1127	sections 1 through 5, and amendments thereto, shall apply to or be
1128	1128	awarded for production or postproduction expenditures made on or after
1129	1129	January 1, 2035.
1130	1130	Sec. 7. K.S.A. 2024 Supp. 79-3606 is hereby amended to read as
1131	1131	follows: 79-3606. The following shall be exempt from the tax imposed by
1132	1132	this act:
1133	1133	(a) All sales of motor-vehicle fuel or other articles upon which a sales
1134	1134	or excise tax has been paid, not subject to refund, under the laws of this
1135	1135	state except cigarettes and electronic cigarettes as defined by K.S.A. 79-
1136	1136	3301, and amendments thereto, including consumable material for such
1137	1137	electronic cigarettes, cereal malt beverages and malt products as defined
1138	1138	by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt,
1139	1139	malt syrup and malt extract, that is not subject to taxation under the
1140	1140	provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles
1141	1141	taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed
1142	1142	pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and
1143	1143	laundry services taxed pursuant to K.S.A. 65-34,150, and amendments
1144	1144	thereto, and gross receipts from regulated sports contests taxed pursuant to
1145	1145	the Kansas professional regulated sports act, and amendments thereto;
1146	1146	(b) all sales of tangible personal property or service, including the
1147	1147	renting and leasing of tangible personal property, purchased directly by the
1148	1148	state of Kansas, a political subdivision thereof, other than a school or
1149	1149	educational institution, or purchased by a public or private nonprofit
1150	1150	hospital, public hospital authority, nonprofit blood, tissue or organ bank or
1151	1151	nonprofit integrated community care organization and used exclusively for
1152	1152	state, political subdivision, hospital, public hospital authority, nonprofit
1153	1153	blood, tissue or organ bank or nonprofit integrated community care
1154	1154	organization purposes, except when: (1) Such state, hospital or public
1155	1155	hospital authority is engaged or proposes to engage in any business
1156	1156	specifically taxable under the provisions of this act and such items of
1157	1157	tangible personal property or service are used or proposed to be used in
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1201	1201	such business; or (2) such political subdivision is engaged or proposes to
1202	1202	engage in the business of furnishing gas, electricity or heat to others and
1203	1203	such items of personal property or service are used or proposed to be used
1204	1204	in such business;
1205	1205	(c) all sales of tangible personal property or services, including the
1206	1206	renting and leasing of tangible personal property, purchased directly by a
1207	1207	public or private elementary or secondary school or public or private
1208	1208	nonprofit educational institution and used primarily by such school or
1209	1209	institution for nonsectarian programs and activities provided or sponsored
1210	1210	by such school or institution or in the erection, repair or enlargement of
1211	1211	buildings to be used for such purposes. The exemption herein provided
1212	1212	shall not apply to erection, construction, repair, enlargement or equipment
1213	1213	of buildings used primarily for human habitation, except that such
1214	1214	exemption shall apply to the erection, construction, repair, enlargement or
1215	1215	equipment of buildings used for human habitation by the cerebral palsy
1216	1216	research foundation of Kansas located in Wichita, Kansas, multi
1217	1217	community diversified services, incorporated, located in McPherson,
1218	1218	Kansas, the Kansas state school for the blind and the Kansas state school
1219	1219	for the deaf;
1220	1220	(d) all sales of tangible personal property or services purchased by a
1221	1221	contractor for the purpose of constructing, equipping, reconstructing,
1222	1222	maintaining, repairing, enlarging, furnishing or remodeling facilities for
1223	1223	any public or private nonprofit hospital or public hospital authority, public
1224	1224	or private elementary or secondary school, a public or private nonprofit
1225	1225	educational institution, state correctional institution including a privately
1226	1226	constructed correctional institution contracted for state use and ownership,
1227	1227	that would be exempt from taxation under the provisions of this act if
1228	1228	purchased directly by such hospital or public hospital authority, school,
1229	1229	educational institution or a state correctional institution; and all sales of
1230	1230	tangible personal property or services purchased by a contractor for the
1231	1231	purpose of constructing, equipping, reconstructing, maintaining, repairing,
1232	1232	enlarging, furnishing or remodeling facilities for any political subdivision
1233	1233	of the state or district described in subsection (s), the total cost of which is
1234	1234	paid from funds of such political subdivision or district and that would be
1235	1235	exempt from taxation under the provisions of this act if purchased directly
1236	1236	by such political subdivision or district. Nothing in this subsection or in
1237	1237	the provisions of K.S.A. 12-3418, and amendments thereto, shall be
1238	1238	deemed to exempt the purchase of any construction machinery, equipment
1239	1239	or tools used in the constructing, equipping, reconstructing, maintaining,
1240	1240	repairing, enlarging, furnishing or remodeling facilities for any political
1241	1241	subdivision of the state or any such district. As used in this subsection,
1242	1242	K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a
1243	1243	political subdivision" shall mean general tax revenues, the proceeds of any
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1286	1286	43 HB 2038 16
1287	1287	bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
1288	1288	purpose of constructing, equipping, reconstructing, repairing, enlarging,
1289	1289	furnishing or remodeling facilities that are to be leased to the donor. When
1290	1290	any political subdivision of the state, district described in subsection (s),
1291	1291	public or private nonprofit hospital or public hospital authority, public or
1292	1292	private elementary or secondary school, public or private nonprofit
1293	1293	educational institution, state correctional institution including a privately
1294	1294	constructed correctional institution contracted for state use and ownership
1295	1295	shall contract for the purpose of constructing, equipping, reconstructing,
1296	1296	maintaining, repairing, enlarging, furnishing or remodeling facilities, it
1297	1297	shall obtain from the state and furnish to the contractor an exemption
1298	1298	certificate for the project involved, and the contractor may purchase
1299	1299	materials for incorporation in such project. The contractor shall furnish the
1300	1300	number of such certificate to all suppliers from whom such purchases are
1301	1301	made, and such suppliers shall execute invoices covering the same bearing
1302	1302	the number of such certificate. Upon completion of the project the
1303	1303	contractor shall furnish to the political subdivision, district described in
1304	1304	subsection (s), hospital or public hospital authority, school, educational
1305	1305	institution or department of corrections concerned a sworn statement, on a
1306	1306	form to be provided by the director of taxation, that all purchases so made
1307	1307	were entitled to exemption under this subsection. As an alternative to the
1308	1308	foregoing procedure, any such contracting entity may apply to the
1309	1309	secretary of revenue for agent status for the sole purpose of issuing and
1310	1310	furnishing project exemption certificates to contractors pursuant to rules
1311	1311	and regulations adopted by the secretary establishing conditions and
1312	1312	standards for the granting and maintaining of such status. All invoices
1313	1313	shall be held by the contractor for a period of five years and shall be
1314	1314	subject to audit by the director of taxation. If any materials purchased
1315	1315	under such a certificate are found not to have been incorporated in the
1316	1316	building or other project or not to have been returned for credit or the sales
1317	1317	or compensating tax otherwise imposed upon such materials that will not
1318	1318	be so incorporated in the building or other project reported and paid by
1319	1319	such contractor to the director of taxation not later than the 20
1320	1320	th
1321	1321	day of the
1322	1322	month following the close of the month in which it shall be determined
1323	1323	that such materials will not be used for the purpose for which such
1324	1324	certificate was issued, the political subdivision, district described in
1325	1325	subsection (s), hospital or public hospital authority, school, educational
1326	1326	institution or the contractor contracting with the department of corrections
1327	1327	for a correctional institution concerned shall be liable for tax on all
1328	1328	materials purchased for the project, and upon payment thereof it may
1329	1329	recover the same from the contractor together with reasonable attorney
1330	1330	fees. Any contractor or any agent, employee or subcontractor thereof, who
1331	1331	shall use or otherwise dispose of any materials purchased under such a
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1374	1374	43 HB 2038 17
1375	1375	certificate for any purpose other than that for which such a certificate is
1376	1376	issued without the payment of the sales or compensating tax otherwise
1377	1377	imposed upon such materials, shall be guilty of a misdemeanor and, upon
1378	1378	conviction therefor, shall be subject to the penalties provided for in K.S.A.
1379	1379	79-3615(h), and amendments thereto;
1380	1380	(e) all sales of tangible personal property or services purchased by a
1381	1381	contractor for the erection, repair or enlargement of buildings or other
1382	1382	projects for the government of the United States, its agencies or
1383	1383	instrumentalities, that would be exempt from taxation if purchased directly
1384	1384	by the government of the United States, its agencies or instrumentalities.
1385	1385	When the government of the United States, its agencies or
1386	1386	instrumentalities shall contract for the erection, repair, or enlargement of
1387	1387	any building or other project, it shall obtain from the state and furnish to
1388	1388	the contractor an exemption certificate for the project involved, and the
1389	1389	contractor may purchase materials for incorporation in such project. The
1390	1390	contractor shall furnish the number of such certificates to all suppliers
1391	1391	from whom such purchases are made, and such suppliers shall execute
1392	1392	invoices covering the same bearing the number of such certificate. Upon
1393	1393	completion of the project the contractor shall furnish to the government of
1394	1394	the United States, its agencies or instrumentalities concerned a sworn
1395	1395	statement, on a form to be provided by the director of taxation, that all
1396	1396	purchases so made were entitled to exemption under this subsection. As an
1397	1397	alternative to the foregoing procedure, any such contracting entity may
1398	1398	apply to the secretary of revenue for agent status for the sole purpose of
1399	1399	issuing and furnishing project exemption certificates to contractors
1400	1400	pursuant to rules and regulations adopted by the secretary establishing
1401	1401	conditions and standards for the granting and maintaining of such status.
1402	1402	All invoices shall be held by the contractor for a period of five years and
1403	1403	shall be subject to audit by the director of taxation. Any contractor or any
1404	1404	agent, employee or subcontractor thereof, who shall use or otherwise
1405	1405	dispose of any materials purchased under such a certificate for any purpose
1406	1406	other than that for which such a certificate is issued without the payment
1407	1407	of the sales or compensating tax otherwise imposed upon such materials,
1408	1408	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
1409	1409	subject to the penalties provided for in K.S.A. 79-3615(h), and
1410	1410	amendments thereto;
1411	1411	(f) tangible personal property purchased by a railroad or public utility
1412	1412	for consumption or movement directly and immediately in interstate
1413	1413	commerce;
1414	1414	(g) sales of aircraft including remanufactured and modified aircraft
1415	1415	sold to persons using directly or through an authorized agent such aircraft
1416	1416	as certified or licensed carriers of persons or property in interstate or
1417	1417	foreign commerce under authority of the laws of the United States or any
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1460	1460	43 HB 2038 18
1461	1461	foreign government or sold to any foreign government or agency or
1462	1462	instrumentality of such foreign government and all sales of aircraft for use
1463	1463	outside of the United States and sales of aircraft repair, modification and
1464	1464	replacement parts and sales of services employed in the remanufacture,
1465	1465	modification and repair of aircraft;
1466	1466	(h) all rentals of nonsectarian textbooks by public or private
1467	1467	elementary or secondary schools;
1468	1468	(i) the lease or rental of all films, records, tapes, or any type of sound
1469	1469	or picture transcriptions used by motion picture exhibitors;
1470	1470	(j) meals served without charge or food used in the preparation of
1471	1471	such meals to employees of any restaurant, eating house, dining car, hotel,
1472	1472	drugstore or other place where meals or drinks are regularly sold to the
1473	1473	public if such employees' duties are related to the furnishing or sale of
1474	1474	such meals or drinks;
1475	1475	(k) any motor vehicle, semitrailer or pole trailer, as such terms are
1476	1476	defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and
1477	1477	delivered in this state to a bona fide resident of another state, which motor
1478	1478	vehicle, semitrailer, pole trailer or aircraft is not to be registered or based
1479	1479	in this state and which vehicle, semitrailer, pole trailer or aircraft will not
1480	1480	remain in this state more than 10 days;
1481	1481	(l) all isolated or occasional sales of tangible personal property,
1482	1482	services, substances or things, except isolated or occasional sale of motor
1483	1483	vehicles specifically taxed under the provisions of K.S.A. 79-3603(o), and
1484	1484	amendments thereto;
1485	1485	(m) all sales of tangible personal property that become an ingredient
1486	1486	or component part of tangible personal property or services produced,
1487	1487	manufactured or compounded for ultimate sale at retail within or without
1488	1488	the state of Kansas; and any such producer, manufacturer or compounder
1489	1489	may obtain from the director of taxation and furnish to the supplier an
1490	1490	exemption certificate number for tangible personal property for use as an
1491	1491	ingredient or component part of the property or services produced,
1492	1492	manufactured or compounded;
1493	1493	(n) all sales of tangible personal property that is consumed in the
1494	1494	production, manufacture, processing, mining, drilling, refining or
1495	1495	compounding of tangible personal property, the treating of by-products or
1496	1496	wastes derived from any such production process, the providing of
1497	1497	services or the irrigation of crops for ultimate sale at retail within or
1498	1498	without the state of Kansas; and any purchaser of such property may
1499	1499	obtain from the director of taxation and furnish to the supplier an
1500	1500	exemption certificate number for tangible personal property for
1501	1501	consumption in such production, manufacture, processing, mining,
1502	1502	drilling, refining, compounding, treating, irrigation and in providing such
1503	1503	services;
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1546	1546	43 HB 2038 19
1547	1547	(o) all sales of animals, fowl and aquatic plants and animals, the
1548	1548	primary purpose of which is use in agriculture or aquaculture, as defined in
1549	1549	K.S.A. 47-1901, and amendments thereto, the production of food for
1550	1550	human consumption, the production of animal, dairy, poultry or aquatic
1551	1551	plant and animal products, fiber or fur, or the production of offspring for
1552	1552	use for any such purpose or purposes;
1553	1553	(p) all sales of drugs dispensed pursuant to a prescription order by a
1554	1554	licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-
1555	1555	1626, and amendments thereto. As used in this subsection, "drug" means a
1556	1556	compound, substance or preparation and any component of a compound,
1557	1557	substance or preparation, other than food and food ingredients, dietary
1558	1558	supplements or alcoholic beverages, recognized in the official United
1559	1559	States pharmacopeia, official homeopathic pharmacopoeia of the United
1560	1560	States or official national formulary, and supplement to any of them,
1561	1561	intended for use in the diagnosis, cure, mitigation, treatment or prevention
1562	1562	of disease or intended to affect the structure or any function of the body,
1563	1563	except that for taxable years commencing after December 31, 2013, this
1564	1564	subsection shall not apply to any sales of drugs used in the performance or
1565	1565	induction of an abortion, as defined in K.S.A. 65-6701, and amendments
1566	1566	thereto;
1567	1567	(q) all sales of insulin dispensed by a person licensed by the state
1568	1568	board of pharmacy to a person for treatment of diabetes at the direction of
1569	1569	a person licensed to practice medicine by the state board of healing arts;
1570	1570	(r) all sales of oxygen delivery equipment, kidney dialysis equipment,
1571	1571	enteral feeding systems, prosthetic devices and mobility enhancing
1572	1572	equipment prescribed in writing by a person licensed to practice the
1573	1573	healing arts, dentistry or optometry, and in addition to such sales, all sales
1574	1574	of hearing aids, as defined by K.S.A. 74-5807(c), and amendments thereto,
1575	1575	and repair and replacement parts therefor, including batteries, by a person
1576	1576	licensed in the practice of dispensing and fitting hearing aids pursuant to
1577	1577	the provisions of K.S.A. 74-5808, and amendments thereto. For the
1578	1578	purposes of this subsection: (1) "Mobility enhancing equipment" means
1579	1579	equipment including repair and replacement parts to same, but does not
1580	1580	include durable medical equipment, which is primarily and customarily
1581	1581	used to provide or increase the ability to move from one place to another
1582	1582	and which is appropriate for use either in a home or a motor vehicle; is not
1583	1583	generally used by persons with normal mobility; and does not include any
1584	1584	motor vehicle or equipment on a motor vehicle normally provided by a
1585	1585	motor vehicle manufacturer; and (2) "prosthetic device" means a
1586	1586	replacement, corrective or supportive device including repair and
1587	1587	replacement parts for same worn on or in the body to artificially replace a
1588	1588	missing portion of the body, prevent or correct physical deformity or
1589	1589	malfunction or support a weak or deformed portion of the body;
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1632	1632	43 HB 2038 20
1633	1633	(s) except as provided in K.S.A. 82a-2101, and amendments thereto,
1634	1634	all sales of tangible personal property or services purchased directly or
1635	1635	indirectly by a groundwater management district organized or operating
1636	1636	under the authority of K.S.A. 82a-1020 et seq., and amendments thereto,
1637	1637	by a rural water district organized or operating under the authority of
1638	1638	K.S.A. 82a-612, and amendments thereto, or by a water supply district
1639	1639	organized or operating under the authority of K.S.A. 19-3501 et seq., 19-
1640	1640	3522 et seq. or 19-3545, and amendments thereto, which property or
1641	1641	services are used in the construction activities, operation or maintenance of
1642	1642	the district;
1643	1643	(t) all sales of farm machinery and equipment or aquaculture
1644	1644	machinery and equipment, repair and replacement parts therefor and
1645	1645	services performed in the repair and maintenance of such machinery and
1646	1646	equipment. For the purposes of this subsection the term "farm machinery
1647	1647	and equipment or aquaculture machinery and equipment" shall include a
1648	1648	work-site utility vehicle, as defined in K.S.A. 8-126, and amendments
1649	1649	thereto, and is equipped with a bed or cargo box for hauling materials, and
1650	1650	shall also include machinery and equipment used in the operation of
1651	1651	Christmas tree farming but shall not include any passenger vehicle, truck,
1652	1652	truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as
1653	1653	such terms are defined by K.S.A. 8-126, and amendments thereto. "Farm
1654	1654	machinery and equipment" includes precision farming equipment that is
1655	1655	portable or is installed or purchased to be installed on farm machinery and
1656	1656	equipment. "Precision farming equipment" includes the following items
1657	1657	used only in computer-assisted farming, ranching or aquaculture
1658	1658	production operations: Soil testing sensors, yield monitors, computers,
1659	1659	monitors, software, global positioning and mapping systems, guiding
1660	1660	systems, modems, data communications equipment and any necessary
1661	1661	mounting hardware, wiring and antennas. Each purchaser of farm
1662	1662	machinery and equipment or aquaculture machinery and equipment
1663	1663	exempted herein must certify in writing on the copy of the invoice or sales
1664	1664	ticket to be retained by the seller that the farm machinery and equipment
1665	1665	or aquaculture machinery and equipment purchased will be used only in
1666	1666	farming, ranching or aquaculture production. Farming or ranching shall
1667	1667	include the operation of a feedlot and farm and ranch work for hire and the
1668	1668	operation of a nursery;
1669	1669	(u) all leases or rentals of tangible personal property used as a
1670	1670	dwelling if such tangible personal property is leased or rented for a period
1671	1671	of more than 28 consecutive days;
1672	1672	(v) all sales of tangible personal property to any contractor for use in
1673	1673	preparing meals for delivery to homebound elderly persons over 60 years
1674	1674	of age and to homebound disabled persons or to be served at a group-
1675	1675	sitting at a location outside of the home to otherwise homebound elderly
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1718	1718	43 HB 2038 21
1719	1719	persons over 60 years of age and to otherwise homebound disabled
1720	1720	persons, as all or part of any food service project funded in whole or in
1721	1721	part by government or as part of a private nonprofit food service project
1722	1722	available to all such elderly or disabled persons residing within an area of
1723	1723	service designated by the private nonprofit organization, and all sales of
1724	1724	tangible personal property for use in preparing meals for consumption by
1725	1725	indigent or homeless individuals whether or not such meals are consumed
1726	1726	at a place designated for such purpose, and all sales of food products by or
1727	1727	on behalf of any such contractor or organization for any such purpose;
1728	1728	(w) all sales of natural gas, electricity, heat and water delivered
1729	1729	through mains, lines or pipes: (1) To residential premises for
1730	1730	noncommercial use by the occupant of such premises; (2) for agricultural
1731	1731	use and also, for such use, all sales of propane gas; (3) for use in the
1732	1732	severing of oil; and (4) to any property which is exempt from property
1733	1733	taxation pursuant to K.S.A. 79-201b, Second through Sixth. As used in this
1734	1734	paragraph, "severing" means the same as defined in K.S.A. 79-4216(k),
1735	1735	and amendments thereto. For all sales of natural gas, electricity and heat
1736	1736	delivered through mains, lines or pipes pursuant to the provisions of
1737	1737	subsection (w)(1) and (w)(2), the provisions of this subsection shall expire
1738	1738	on December 31, 2005;
1739	1739	(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources
1740	1740	for the production of heat or lighting for noncommercial use of an
1741	1741	occupant of residential premises occurring prior to January 1, 2006;
1742	1742	(y) all sales of materials and services used in the repairing, servicing,
1743	1743	altering, maintaining, manufacturing, remanufacturing, or modification of
1744	1744	railroad rolling stock for use in interstate or foreign commerce under
1745	1745	authority of the laws of the United States;
1746	1746	(z) all sales of tangible personal property and services purchased
1747	1747	directly by a port authority or by a contractor therefor as provided by the
1748	1748	provisions of K.S.A. 12-3418, and amendments thereto;
1749	1749	(aa) all sales of materials and services applied to equipment that is
1750	1750	transported into the state from without the state for repair, service,
1751	1751	alteration, maintenance, remanufacture or modification and that is
1752	1752	subsequently transported outside the state for use in the transmission of
1753	1753	liquids or natural gas by means of pipeline in interstate or foreign
1754	1754	commerce under authority of the laws of the United States;
1755	1755	(bb) all sales of used mobile homes or manufactured homes. As used
1756	1756	in this subsection: (1) "Mobile homes" and "manufactured homes" mean
1757	1757	the same as defined in K.S.A. 58-4202, and amendments thereto; and (2)
1758	1758	"sales of used mobile homes or manufactured homes" means sales other
1759	1759	than the original retail sale thereof;
1760	1760	(cc) all sales of tangible personal property or services purchased prior
1761	1761	to January 1, 2012, except as otherwise provided, for the purpose of and in
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1804	1804	43 HB 2038 22
1805	1805	conjunction with constructing, reconstructing, enlarging or remodeling a
1806	1806	business or retail business that meets the requirements established in
1807	1807	K.S.A. 74-50,115, and amendments thereto, and the sale and installation of
1808	1808	machinery and equipment purchased for installation at any such business
1809	1809	or retail business, and all sales of tangible personal property or services
1810	1810	purchased on or after January 1, 2012, for the purpose of and in
1811	1811	conjunction with constructing, reconstructing, enlarging or remodeling a
1812	1812	business that meets the requirements established in K.S.A. 74-50,115(e),
1813	1813	and amendments thereto, and the sale and installation of machinery and
1814	1814	equipment purchased for installation at any such business. When a person
1815	1815	shall contract for the construction, reconstruction, enlargement or
1816	1816	remodeling of any such business or retail business, such person shall
1817	1817	obtain from the state and furnish to the contractor an exemption certificate
1818	1818	for the project involved, and the contractor may purchase materials,
1819	1819	machinery and equipment for incorporation in such project. The contractor
1820	1820	shall furnish the number of such certificates to all suppliers from whom
1821	1821	such purchases are made, and such suppliers shall execute invoices
1822	1822	covering the same bearing the number of such certificate. Upon
1823	1823	completion of the project the contractor shall furnish to the owner of the
1824	1824	business or retail business a sworn statement, on a form to be provided by
1825	1825	the director of taxation, that all purchases so made were entitled to
1826	1826	exemption under this subsection. All invoices shall be held by the
1827	1827	contractor for a period of five years and shall be subject to audit by the
1828	1828	director of taxation. Any contractor or any agent, employee or
1829	1829	subcontractor thereof, who shall use or otherwise dispose of any materials,
1830	1830	machinery or equipment purchased under such a certificate for any
1831	1831	purpose other than that for which such a certificate is issued without the
1832	1832	payment of the sales or compensating tax otherwise imposed thereon, shall
1833	1833	be guilty of a misdemeanor and, upon conviction therefor, shall be subject
1834	1834	to the penalties provided for in K.S.A. 79-3615(h), and amendments
1835	1835	thereto. As used in this subsection, "business" and "retail business" mean
1836	1836	the same as defined in K.S.A. 74-50,114, and amendments thereto. Project
1837	1837	exemption certificates that have been previously issued under this
1838	1838	subsection by the department of revenue pursuant to K.S.A. 74-50,115,
1839	1839	and amendments thereto, but not including K.S.A. 74-50,115(e), and
1840	1840	amendments thereto, prior to January 1, 2012, and have not expired will be
1841	1841	effective for the term of the project or two years from the effective date of
1842	1842	the certificate, whichever occurs earlier. Project exemption certificates that
1843	1843	are submitted to the department of revenue prior to January 1, 2012, and
1844	1844	are found to qualify will be issued a project exemption certificate that will
1845	1845	be effective for a two-year period or for the term of the project, whichever
1846	1846	occurs earlier;
1847	1847	(dd) all sales of tangible personal property purchased with food
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1890	1890	43 HB 2038 23
1891	1891	stamps issued by the United States department of agriculture;
1892	1892	(ee) all sales of lottery tickets and shares made as part of a lottery
1893	1893	operated by the state of Kansas;
1894	1894	(ff) on and after July 1, 1988, all sales of new mobile homes or
1895	1895	manufactured homes to the extent of 40% of the gross receipts, determined
1896	1896	without regard to any trade-in allowance, received from such sale. As used
1897	1897	in this subsection, "mobile homes" and "manufactured homes" mean the
1898	1898	same as defined in K.S.A. 58-4202, and amendments thereto;
1899	1899	(gg) all sales of tangible personal property purchased in accordance
1900	1900	with vouchers issued pursuant to the federal special supplemental food
1901	1901	program for women, infants and children;
1902	1902	(hh) all sales of medical supplies and equipment, including durable
1903	1903	medical equipment, purchased directly by a nonprofit skilled nursing home
1904	1904	or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
1905	1905	and amendments thereto, for the purpose of providing medical services to
1906	1906	residents thereof. This exemption shall not apply to tangible personal
1907	1907	property customarily used for human habitation purposes. As used in this
1908	1908	subsection, "durable medical equipment" means equipment including
1909	1909	repair and replacement parts for such equipment, that can withstand
1910	1910	repeated use, is primarily and customarily used to serve a medical purpose,
1911	1911	generally is not useful to a person in the absence of illness or injury and is
1912	1912	not worn in or on the body, but does not include mobility enhancing
1913	1913	equipment as defined in subsection (r), oxygen delivery equipment, kidney
1914	1914	dialysis equipment or enteral feeding systems;
1915	1915	(ii) all sales of tangible personal property purchased directly by a
1916	1916	nonprofit organization for nonsectarian comprehensive multidiscipline
1917	1917	youth development programs and activities provided or sponsored by such
1918	1918	organization, and all sales of tangible personal property by or on behalf of
1919	1919	any such organization. This exemption shall not apply to tangible personal
1920	1920	property customarily used for human habitation purposes;
1921	1921	(jj) all sales of tangible personal property or services, including the
1922	1922	renting and leasing of tangible personal property, purchased directly on
1923	1923	behalf of a community-based facility for people with intellectual disability
1924	1924	or mental health center organized pursuant to K.S.A. 19-4001 et seq., and
1925	1925	amendments thereto, and licensed in accordance with the provisions of
1926	1926	K.S.A. 39-2001 et seq., and amendments thereto, and all sales of tangible
1927	1927	personal property or services purchased by contractors during the time
1928	1928	period from July, 2003, through June, 2006, for the purpose of
1929	1929	constructing, equipping, maintaining or furnishing a new facility for a
1930	1930	community-based facility for people with intellectual disability or mental
1931	1931	health center located in Riverton, Cherokee County, Kansas, that would
1932	1932	have been eligible for sales tax exemption pursuant to this subsection if
1933	1933	purchased directly by such facility or center. This exemption shall not
1934	1934	1
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1976	1976	43 HB 2038 24
1977	1977	apply to tangible personal property customarily used for human habitation
1978	1978	purposes;
1979	1979	(kk) (1) (A) all sales of machinery and equipment that are used in this
1980	1980	state as an integral or essential part of an integrated production operation
1981	1981	by a manufacturing or processing plant or facility;
1982	1982	(B) all sales of installation, repair and maintenance services
1983	1983	performed on such machinery and equipment; and
1984	1984	(C) all sales of repair and replacement parts and accessories
1985	1985	purchased for such machinery and equipment.
1986	1986	(2) For purposes of this subsection:
1987	1987	(A) "Integrated production operation" means an integrated series of
1988	1988	operations engaged in at a manufacturing or processing plant or facility to
1989	1989	process, transform or convert tangible personal property by physical,
1990	1990	chemical or other means into a different form, composition or character
1991	1991	from that in which it originally existed. Integrated production operations
1992	1992	shall include: (i) Production line operations, including packaging
1993	1993	operations; (ii) preproduction operations to handle, store and treat raw
1994	1994	materials; (iii) post production handling, storage, warehousing and
1995	1995	distribution operations; and (iv) waste, pollution and environmental
1996	1996	control operations, if any;
1997	1997	(B) "production line" means the assemblage of machinery and
1998	1998	equipment at a manufacturing or processing plant or facility where the
1999	1999	actual transformation or processing of tangible personal property occurs;
2000	2000	(C) "manufacturing or processing plant or facility" means a single,
2001	2001	fixed location owned or controlled by a manufacturing or processing
2002	2002	business that consists of one or more structures or buildings in a
2003	2003	contiguous area where integrated production operations are conducted to
2004	2004	manufacture or process tangible personal property to be ultimately sold at
2005	2005	retail. Such term shall not include any facility primarily operated for the
2006	2006	purpose of conveying or assisting in the conveyance of natural gas,
2007	2007	electricity, oil or water. A business may operate one or more manufacturing
2008	2008	or processing plants or facilities at different locations to manufacture or
2009	2009	process a single product of tangible personal property to be ultimately sold
2010	2010	at retail;
2011	2011	(D) "manufacturing or processing business" means a business that
2012	2012	utilizes an integrated production operation to manufacture, process,
2013	2013	fabricate, finish or assemble items for wholesale and retail distribution as
2014	2014	part of what is commonly regarded by the general public as an industrial
2015	2015	manufacturing or processing operation or an agricultural commodity
2016	2016	processing operation. (i) Industrial manufacturing or processing operations
2017	2017	include, by way of illustration but not of limitation, the fabrication of
2018	2018	automobiles, airplanes, machinery or transportation equipment, the
2019	2019	fabrication of metal, plastic, wood or paper products, electricity power
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2062	2062	43 HB 2038 25
2063	2063	generation, water treatment, petroleum refining, chemical production,
2064	2064	wholesale bottling, newspaper printing, ready mixed concrete production,
2065	2065	and the remanufacturing of used parts for wholesale or retail sale. Such
2066	2066	processing operations shall include operations at an oil well, gas well,
2067	2067	mine or other excavation site where the oil, gas, minerals, coal, clay, stone,
2068	2068	sand or gravel that has been extracted from the earth is cleaned, separated,
2069	2069	crushed, ground, milled, screened, washed or otherwise treated or prepared
2070	2070	before its transmission to a refinery or before any other wholesale or retail
2071	2071	distribution. (ii) Agricultural commodity processing operations include, by
2072	2072	way of illustration but not of limitation, meat packing, poultry slaughtering
2073	2073	and dressing, processing and packaging farm and dairy products in sealed
2074	2074	containers for wholesale and retail distribution, feed grinding, grain
2075	2075	milling, frozen food processing, and grain handling, cleaning, blending,
2076	2076	fumigation, drying and aeration operations engaged in by grain elevators
2077	2077	or other grain storage facilities. (iii) Manufacturing or processing
2078	2078	businesses do not include, by way of illustration but not of limitation,
2079	2079	nonindustrial businesses whose operations are primarily retail and that
2080	2080	produce or process tangible personal property as an incidental part of
2081	2081	conducting the retail business, such as retailers who bake, cook or prepare
2082	2082	food products in the regular course of their retail trade, grocery stores,
2083	2083	meat lockers and meat markets that butcher or dress livestock or poultry in
2084	2084	the regular course of their retail trade, contractors who alter, service, repair
2085	2085	or improve real property, and retail businesses that clean, service or
2086	2086	refurbish and repair tangible personal property for its owner;
2087	2087	(E) "repair and replacement parts and accessories" means all parts
2088	2088	and accessories for exempt machinery and equipment, including, but not
2089	2089	limited to, dies, jigs, molds, patterns and safety devices that are attached to
2090	2090	exempt machinery or that are otherwise used in production, and parts and
2091	2091	accessories that require periodic replacement such as belts, drill bits,
2092	2092	grinding wheels, grinding balls, cutting bars, saws, refractory brick and
2093	2093	other refractory items for exempt kiln equipment used in production
2094	2094	operations;
2095	2095	(F) "primary" or "primarily" mean more than 50% of the time.
2096	2096	(3) For purposes of this subsection, machinery and equipment shall
2097	2097	be deemed to be used as an integral or essential part of an integrated
2098	2098	production operation when used to:
2099	2099	(A) Receive, transport, convey, handle, treat or store raw materials in
2100	2100	preparation of its placement on the production line;
2101	2101	(B) transport, convey, handle or store the property undergoing
2102	2102	manufacturing or processing at any point from the beginning of the
2103	2103	production line through any warehousing or distribution operation of the
2104	2104	final product that occurs at the plant or facility;
2105	2105	(C) act upon, effect, promote or otherwise facilitate a physical change
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2148	2148	43 HB 2038 26
2149	2149	to the property undergoing manufacturing or processing;
2150	2150	(D) guide, control or direct the movement of property undergoing
2151	2151	manufacturing or processing;
2152	2152	(E) test or measure raw materials, the property undergoing
2153	2153	manufacturing or processing or the finished product, as a necessary part of
2154	2154	the manufacturer's integrated production operations;
2155	2155	(F) plan, manage, control or record the receipt and flow of inventories
2156	2156	of raw materials, consumables and component parts, the flow of the
2157	2157	property undergoing manufacturing or processing and the management of
2158	2158	inventories of the finished product;
2159	2159	(G) produce energy for, lubricate, control the operating of or
2160	2160	otherwise enable the functioning of other production machinery and
2161	2161	equipment and the continuation of production operations;
2162	2162	(H) package the property being manufactured or processed in a
2163	2163	container or wrapping in which such property is normally sold or
2164	2164	transported;
2165	2165	(I) transmit or transport electricity, coke, gas, water, steam or similar
2166	2166	substances used in production operations from the point of generation, if
2167	2167	produced by the manufacturer or processor at the plant site, to that
2168	2168	manufacturer's production operation; or, if purchased or delivered from
2169	2169	off-site, from the point where the substance enters the site of the plant or
2170	2170	facility to that manufacturer's production operations;
2171	2171	(J) cool, heat, filter, refine or otherwise treat water, steam, acid, oil,
2172	2172	solvents or other substances that are used in production operations;
2173	2173	(K) provide and control an environment required to maintain certain
2174	2174	levels of air quality, humidity or temperature in special and limited areas
2175	2175	of the plant or facility, where such regulation of temperature or humidity is
2176	2176	part of and essential to the production process;
2177	2177	(L) treat, transport or store waste or other byproducts of production
2178	2178	operations at the plant or facility; or
2179	2179	(M) control pollution at the plant or facility where the pollution is
2180	2180	produced by the manufacturing or processing operation.
2181	2181	(4) The following machinery, equipment and materials shall be
2182	2182	deemed to be exempt even though it may not otherwise qualify as
2183	2183	machinery and equipment used as an integral or essential part of an
2184	2184	integrated production operation: (A) Computers and related peripheral
2185	2185	equipment that are utilized by a manufacturing or processing business for
2186	2186	engineering of the finished product or for research and development or
2187	2187	product design; (B) machinery and equipment that is utilized by a
2188	2188	manufacturing or processing business to manufacture or rebuild tangible
2189	2189	personal property that is used in manufacturing or processing operations,
2190	2190	including tools, dies, molds, forms and other parts of qualifying machinery
2191	2191	and equipment; (C) portable plants for aggregate concrete, bulk cement
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2234	2234	43 HB 2038 27
2235	2235	and asphalt including cement mixing drums to be attached to a motor
2236	2236	vehicle; (D) industrial fixtures, devices, support facilities and special
2237	2237	foundations necessary for manufacturing and production operations, and
2238	2238	materials and other tangible personal property sold for the purpose of
2239	2239	fabricating such fixtures, devices, facilities and foundations. An exemption
2240	2240	certificate for such purchases shall be signed by the manufacturer or
2241	2241	processor. If the fabricator purchases such material, the fabricator shall
2242	2242	also sign the exemption certificate; (E) a manufacturing or processing
2243	2243	business' laboratory equipment that is not located at the plant or facility,
2244	2244	but that would otherwise qualify for exemption under subsection (3)(E);
2245	2245	(F) all machinery and equipment used in surface mining activities as
2246	2246	described in K.S.A. 49-601 et seq., and amendments thereto, beginning
2247	2247	from the time a reclamation plan is filed to the acceptance of the
2248	2248	completed final site reclamation.
2249	2249	(5) "Machinery and equipment used as an integral or essential part of
2250	2250	an integrated production operation" shall not include:
2251	2251	(A) Machinery and equipment used for nonproduction purposes,
2252	2252	including, but not limited to, machinery and equipment used for plant
2253	2253	security, fire prevention, first aid, accounting, administration, record
2254	2254	keeping, advertising, marketing, sales or other related activities, plant
2255	2255	cleaning, plant communications and employee work scheduling;
2256	2256	(B) machinery, equipment and tools used primarily in maintaining
2257	2257	and repairing any type of machinery and equipment or the building and
2258	2258	plant;
2259	2259	(C) transportation, transmission and distribution equipment not
2260	2260	primarily used in a production, warehousing or material handling
2261	2261	operation at the plant or facility, including the means of conveyance of
2262	2262	natural gas, electricity, oil or water, and equipment related thereto, located
2263	2263	outside the plant or facility;
2264	2264	(D) office machines and equipment including computers and related
2265	2265	peripheral equipment not used directly and primarily to control or measure
2266	2266	the manufacturing process;
2267	2267	(E) furniture and other furnishings;
2268	2268	(F) buildings, other than exempt machinery and equipment that is
2269	2269	permanently affixed to or becomes a physical part of the building, and any
2270	2270	other part of real estate that is not otherwise exempt;
2271	2271	(G) building fixtures that are not integral to the manufacturing
2272	2272	operation, such as utility systems for heating, ventilation, air conditioning,
2273	2273	communications, plumbing or electrical;
2274	2274	(H) machinery and equipment used for general plant heating, cooling
2275	2275	and lighting;
2276	2276	(I) motor vehicles that are registered for operation on public
2277	2277	highways; or
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2320	2320	43 HB 2038 28
2321	2321	(J) employee apparel, except safety and protective apparel that is
2322	2322	purchased by an employer and furnished gratuitously to employees who
2323	2323	are involved in production or research activities.
2324	2324	(6) Paragraphs (3) and (5) shall not be construed as exclusive listings
2325	2325	of the machinery and equipment that qualify or do not qualify as an
2326	2326	integral or essential part of an integrated production operation. When
2327	2327	machinery or equipment is used as an integral or essential part of
2328	2328	production operations part of the time and for nonproduction purposes at
2329	2329	other times, the primary use of the machinery or equipment shall
2330	2330	determine whether or not such machinery or equipment qualifies for
2331	2331	exemption.
2332	2332	(7) The secretary of revenue shall adopt rules and regulations
2333	2333	necessary to administer the provisions of this subsection;
2334	2334	(ll) all sales of educational materials purchased for distribution to the
2335	2335	public at no charge by a nonprofit corporation organized for the purpose of
2336	2336	encouraging, fostering and conducting programs for the improvement of
2337	2337	public health, except that for taxable years commencing after December
2338	2338	31, 2013, this subsection shall not apply to any sales of such materials
2339	2339	purchased by a nonprofit corporation which performs any abortion, as
2340	2340	defined in K.S.A. 65-6701, and amendments thereto;
2341	2341	(mm) all sales of seeds and tree seedlings; fertilizers, insecticides,
2342	2342	herbicides, germicides, pesticides and fungicides; and services, purchased
2343	2343	and used for the purpose of producing plants in order to prevent soil
2344	2344	erosion on land devoted to agricultural use;
2345	2345	(nn) except as otherwise provided in this act, all sales of services
2346	2346	rendered by an advertising agency or licensed broadcast station or any
2347	2347	member, agent or employee thereof;
2348	2348	(oo) all sales of tangible personal property purchased by a community
2349	2349	action group or agency for the exclusive purpose of repairing or
2350	2350	weatherizing housing occupied by low-income individuals;
2351	2351	(pp) all sales of drill bits and explosives actually utilized in the
2352	2352	exploration and production of oil or gas;
2353	2353	(qq) all sales of tangible personal property and services purchased by
2354	2354	a nonprofit museum or historical society or any combination thereof,
2355	2355	including a nonprofit organization that is organized for the purpose of
2356	2356	stimulating public interest in the exploration of space by providing
2357	2357	educational information, exhibits and experiences, that is exempt from
2358	2358	federal income taxation pursuant to section 501(c)(3) of the federal
2359	2359	internal revenue code of 1986;
2360	2360	(rr) all sales of tangible personal property that will admit the
2361	2361	purchaser thereof to any annual event sponsored by a nonprofit
2362	2362	organization that is exempt from federal income taxation pursuant to
2363	2363	section 501(c)(3) of the federal internal revenue code of 1986, except that
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2406	2406	43 HB 2038 29
2407	2407	for taxable years commencing after December 31, 2013, this subsection
2408	2408	shall not apply to any sales of such tangible personal property purchased
2409	2409	by a nonprofit organization which performs any abortion, as defined in
2410	2410	K.S.A. 65-6701, and amendments thereto;
2411	2411	(ss) all sales of tangible personal property and services purchased by
2412	2412	a public broadcasting station licensed by the federal communications
2413	2413	commission as a noncommercial educational television or radio station;
2414	2414	(tt) all sales of tangible personal property and services purchased by
2415	2415	or on behalf of a not-for-profit corporation that is exempt from federal
2416	2416	income taxation pursuant to section 501(c)(3) of the federal internal
2417	2417	revenue code of 1986, for the sole purpose of constructing a Kansas
2418	2418	Korean War memorial;
2419	2419	(uu) all sales of tangible personal property and services purchased by
2420	2420	or on behalf of any rural volunteer fire-fighting organization for use
2421	2421	exclusively in the performance of its duties and functions;
2422	2422	(vv) all sales of tangible personal property purchased by any of the
2423	2423	following organizations that are exempt from federal income taxation
2424	2424	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
2425	2425	for the following purposes, and all sales of any such property by or on
2426	2426	behalf of any such organization for any such purpose:
2427	2427	(1) The American heart association, Kansas affiliate, inc. for the
2428	2428	purposes of providing education, training, certification in emergency
2429	2429	cardiac care, research and other related services to reduce disability and
2430	2430	death from cardiovascular diseases and stroke;
2431	2431	(2) the Kansas alliance for the mentally ill, inc. for the purpose of
2432	2432	advocacy for persons with mental illness and to education, research and
2433	2433	support for their families;
2434	2434	(3) the Kansas mental illness awareness council for the purposes of
2435	2435	advocacy for persons who are mentally ill and for education, research and
2436	2436	support for them and their families;
2437	2437	(4) the American diabetes association Kansas affiliate, inc. for the
2438	2438	purpose of eliminating diabetes through medical research, public education
2439	2439	focusing on disease prevention and education, patient education including
2440	2440	information on coping with diabetes, and professional education and
2441	2441	training;
2442	2442	(5) the American lung association of Kansas, inc. for the purpose of
2443	2443	eliminating all lung diseases through medical research, public education
2444	2444	including information on coping with lung diseases, professional education
2445	2445	and training related to lung disease and other related services to reduce the
2446	2446	incidence of disability and death due to lung disease;
2447	2447	(6) the Kansas chapters of the Alzheimer's disease and related
2448	2448	disorders association, inc. for the purpose of providing assistance and
2449	2449	support to persons in Kansas with Alzheimer's disease, and their families
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2451	2451	2
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2492	2492	43 HB 2038 30
2493	2493	and caregivers;
2494	2494	(7) the Kansas chapters of the Parkinson's disease association for the
2495	2495	purpose of eliminating Parkinson's disease through medical research and
2496	2496	public and professional education related to such disease;
2497	2497	(8) the national kidney foundation of Kansas and western Missouri
2498	2498	for the purpose of eliminating kidney disease through medical research
2499	2499	and public and private education related to such disease;
2500	2500	(9) the heartstrings community foundation for the purpose of
2501	2501	providing training, employment and activities for adults with
2502	2502	developmental disabilities;
2503	2503	(10) the cystic fibrosis foundation, heart of America chapter, for the
2504	2504	purposes of assuring the development of the means to cure and control
2505	2505	cystic fibrosis and improving the quality of life for those with the disease;
2506	2506	(11) the spina bifida association of Kansas for the purpose of
2507	2507	providing financial, educational and practical aid to families and
2508	2508	individuals with spina bifida. Such aid includes, but is not limited to,
2509	2509	funding for medical devices, counseling and medical educational
2510	2510	opportunities;
2511	2511	(12) the CHWC, Inc., for the purpose of rebuilding urban core
2512	2512	neighborhoods through the construction of new homes, acquiring and
2513	2513	renovating existing homes and other related activities, and promoting
2514	2514	economic development in such neighborhoods;
2515	2515	(13) the cross-lines cooperative council for the purpose of providing
2516	2516	social services to low income individuals and families;
2517	2517	(14) the dreams work, inc., for the purpose of providing young adult
2518	2518	day services to individuals with developmental disabilities and assisting
2519	2519	families in avoiding institutional or nursing home care for a
2520	2520	developmentally disabled member of their family;
2521	2521	(15) the KSDS, Inc., for the purpose of promoting the independence
2522	2522	and inclusion of people with disabilities as fully participating and
2523	2523	contributing members of their communities and society through the
2524	2524	training and providing of guide and service dogs to people with
2525	2525	disabilities, and providing disability education and awareness to the
2526	2526	general public;
2527	2527	(16) the lyme association of greater Kansas City, Inc., for the purpose
2528	2528	of providing support to persons with lyme disease and public education
2529	2529	relating to the prevention, treatment and cure of lyme disease;
2530	2530	(17) the dream factory, inc., for the purpose of granting the dreams of
2531	2531	children with critical and chronic illnesses;
2532	2532	(18) the Ottawa Suzuki strings, inc., for the purpose of providing
2533	2533	students and families with education and resources necessary to enable
2534	2534	each child to develop fine character and musical ability to the fullest
2535	2535	potential;
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2578	2578	43 HB 2038 31
2579	2579	(19) the international association of lions clubs for the purpose of
2580	2580	creating and fostering a spirit of understanding among all people for
2581	2581	humanitarian needs by providing voluntary services through community
2582	2582	involvement and international cooperation;
2583	2583	(20) the Johnson county young matrons, inc., for the purpose of
2584	2584	promoting a positive future for members of the community through
2585	2585	volunteerism, financial support and education through the efforts of an all
2586	2586	volunteer organization;
2587	2587	(21) the American cancer society, inc., for the purpose of eliminating
2588	2588	cancer as a major health problem by preventing cancer, saving lives and
2589	2589	diminishing suffering from cancer, through research, education, advocacy
2590	2590	and service;
2591	2591	(22) the community services of Shawnee, inc., for the purpose of
2592	2592	providing food and clothing to those in need;
2593	2593	(23) the angel babies association, for the purpose of providing
2594	2594	assistance, support and items of necessity to teenage mothers and their
2595	2595	babies; and
2596	2596	(24) the Kansas fairgrounds foundation for the purpose of the
2597	2597	preservation, renovation and beautification of the Kansas state fairgrounds;
2598	2598	(ww) all sales of tangible personal property purchased by the habitat
2599	2599	for humanity for the exclusive use of being incorporated within a housing
2600	2600	project constructed by such organization;
2601	2601	(xx) all sales of tangible personal property and services purchased by
2602	2602	a nonprofit zoo that is exempt from federal income taxation pursuant to
2603	2603	section 501(c)(3) of the federal internal revenue code of 1986, or on behalf
2604	2604	of such zoo by an entity itself exempt from federal income taxation
2605	2605	pursuant to section 501(c)(3) of the federal internal revenue code of 1986
2606	2606	contracted with to operate such zoo and all sales of tangible personal
2607	2607	property or services purchased by a contractor for the purpose of
2608	2608	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
2609	2609	furnishing or remodeling facilities for any nonprofit zoo that would be
2610	2610	exempt from taxation under the provisions of this section if purchased
2611	2611	directly by such nonprofit zoo or the entity operating such zoo. Nothing in
2612	2612	this subsection shall be deemed to exempt the purchase of any construction
2613	2613	machinery, equipment or tools used in the constructing, equipping,
2614	2614	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
2615	2615	facilities for any nonprofit zoo. When any nonprofit zoo shall contract for
2616	2616	the purpose of constructing, equipping, reconstructing, maintaining,
2617	2617	repairing, enlarging, furnishing or remodeling facilities, it shall obtain
2618	2618	from the state and furnish to the contractor an exemption certificate for the
2619	2619	project involved, and the contractor may purchase materials for
2620	2620	incorporation in such project. The contractor shall furnish the number of
2621	2621	such certificate to all suppliers from whom such purchases are made, and
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2664	2664	43 HB 2038 32
2665	2665	such suppliers shall execute invoices covering the same bearing the
2666	2666	number of such certificate. Upon completion of the project the contractor
2667	2667	shall furnish to the nonprofit zoo concerned a sworn statement, on a form
2668	2668	to be provided by the director of taxation, that all purchases so made were
2669	2669	entitled to exemption under this subsection. All invoices shall be held by
2670	2670	the contractor for a period of five years and shall be subject to audit by the
2671	2671	director of taxation. If any materials purchased under such a certificate are
2672	2672	found not to have been incorporated in the building or other project or not
2673	2673	to have been returned for credit or the sales or compensating tax otherwise
2674	2674	imposed upon such materials that will not be so incorporated in the
2675	2675	building or other project reported and paid by such contractor to the
2676	2676	director of taxation not later than the 20
2677	2677	th
2678	2678	day of the month following the
2679	2679	close of the month in which it shall be determined that such materials will
2680	2680	not be used for the purpose for which such certificate was issued, the
2681	2681	nonprofit zoo concerned shall be liable for tax on all materials purchased
2682	2682	for the project, and upon payment thereof it may recover the same from
2683	2683	the contractor together with reasonable attorney fees. Any contractor or
2684	2684	any agent, employee or subcontractor thereof, who shall use or otherwise
2685	2685	dispose of any materials purchased under such a certificate for any purpose
2686	2686	other than that for which such a certificate is issued without the payment
2687	2687	of the sales or compensating tax otherwise imposed upon such materials,
2688	2688	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
2689	2689	subject to the penalties provided for in K.S.A. 79-3615(h), and
2690	2690	amendments thereto;
2691	2691	(yy) all sales of tangible personal property and services purchased by
2692	2692	a parent-teacher association or organization, and all sales of tangible
2693	2693	personal property by or on behalf of such association or organization;
2694	2694	(zz) all sales of machinery and equipment purchased by over-the-air,
2695	2695	free access radio or television station that is used directly and primarily for
2696	2696	the purpose of producing a broadcast signal or is such that the failure of
2697	2697	the machinery or equipment to operate would cause broadcasting to cease.
2698	2698	For purposes of this subsection, machinery and equipment shall include,
2699	2699	but not be limited to, that required by rules and regulations of the federal
2700	2700	communications commission, and all sales of electricity which are
2701	2701	essential or necessary for the purpose of producing a broadcast signal or is
2702	2702	such that the failure of the electricity would cause broadcasting to cease;
2703	2703	(aaa) all sales of tangible personal property and services purchased by
2704	2704	a religious organization that is exempt from federal income taxation
2705	2705	pursuant to section 501(c)(3) of the federal internal revenue code, and used
2706	2706	exclusively for religious purposes, and all sales of tangible personal
2707	2707	property or services purchased by a contractor for the purpose of
2708	2708	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
2709	2709	furnishing or remodeling facilities for any such organization that would be
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2752	2752	43 HB 2038 33
2753	2753	exempt from taxation under the provisions of this section if purchased
2754	2754	directly by such organization. Nothing in this subsection shall be deemed
2755	2755	to exempt the purchase of any construction machinery, equipment or tools
2756	2756	used in the constructing, equipping, reconstructing, maintaining, repairing,
2757	2757	enlarging, furnishing or remodeling facilities for any such organization.
2758	2758	When any such organization shall contract for the purpose of constructing,
2759	2759	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
2760	2760	remodeling facilities, it shall obtain from the state and furnish to the
2761	2761	contractor an exemption certificate for the project involved, and the
2762	2762	contractor may purchase materials for incorporation in such project. The
2763	2763	contractor shall furnish the number of such certificate to all suppliers from
2764	2764	whom such purchases are made, and such suppliers shall execute invoices
2765	2765	covering the same bearing the number of such certificate. Upon
2766	2766	completion of the project the contractor shall furnish to such organization
2767	2767	concerned a sworn statement, on a form to be provided by the director of
2768	2768	taxation, that all purchases so made were entitled to exemption under this
2769	2769	subsection. All invoices shall be held by the contractor for a period of five
2770	2770	years and shall be subject to audit by the director of taxation. If any
2771	2771	materials purchased under such a certificate are found not to have been
2772	2772	incorporated in the building or other project or not to have been returned
2773	2773	for credit or the sales or compensating tax otherwise imposed upon such
2774	2774	materials that will not be so incorporated in the building or other project
2775	2775	reported and paid by such contractor to the director of taxation not later
2776	2776	than the 20
2777	2777	th
2778	2778	day of the month following the close of the month in which it
2779	2779	shall be determined that such materials will not be used for the purpose for
2780	2780	which such certificate was issued, such organization concerned shall be
2781	2781	liable for tax on all materials purchased for the project, and upon payment
2782	2782	thereof it may recover the same from the contractor together with
2783	2783	reasonable attorney fees. Any contractor or any agent, employee or
2784	2784	subcontractor thereof, who shall use or otherwise dispose of any materials
2785	2785	purchased under such a certificate for any purpose other than that for
2786	2786	which such a certificate is issued without the payment of the sales or
2787	2787	compensating tax otherwise imposed upon such materials, shall be guilty
2788	2788	of a misdemeanor and, upon conviction therefor, shall be subject to the
2789	2789	penalties provided for in K.S.A. 79-3615(h), and amendments thereto.
2790	2790	Sales tax paid on and after July 1, 1998, but prior to the effective date of
2791	2791	this act upon the gross receipts received from any sale exempted by the
2792	2792	amendatory provisions of this subsection shall be refunded. Each claim for
2793	2793	a sales tax refund shall be verified and submitted to the director of taxation
2794	2794	upon forms furnished by the director and shall be accompanied by any
2795	2795	additional documentation required by the director. The director shall
2796	2796	review each claim and shall refund that amount of sales tax paid as
2797	2797	determined under the provisions of this subsection. All refunds shall be
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2799	2799	2
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2840	2840	43 HB 2038 34
2841	2841	paid from the sales tax refund fund upon warrants of the director of
2842	2842	accounts and reports pursuant to vouchers approved by the director or the
2843	2843	director's designee;
2844	2844	(bbb) all sales of food for human consumption by an organization that
2845	2845	is exempt from federal income taxation pursuant to section 501(c)(3) of
2846	2846	the federal internal revenue code of 1986, pursuant to a food distribution
2847	2847	program that offers such food at a price below cost in exchange for the
2848	2848	performance of community service by the purchaser thereof;
2849	2849	(ccc) on and after July 1, 1999, all sales of tangible personal property
2850	2850	and services purchased by a primary care clinic or health center the
2851	2851	primary purpose of which is to provide services to medically underserved
2852	2852	individuals and families, and that is exempt from federal income taxation
2853	2853	pursuant to section 501(c)(3) of the federal internal revenue code, and all
2854	2854	sales of tangible personal property or services purchased by a contractor
2855	2855	for the purpose of constructing, equipping, reconstructing, maintaining,
2856	2856	repairing, enlarging, furnishing or remodeling facilities for any such clinic
2857	2857	or center that would be exempt from taxation under the provisions of this
2858	2858	section if purchased directly by such clinic or center, except that for
2859	2859	taxable years commencing after December 31, 2013, this subsection shall
2860	2860	not apply to any sales of such tangible personal property and services
2861	2861	purchased by a primary care clinic or health center which performs any
2862	2862	abortion, as defined in K.S.A. 65-6701, and amendments thereto. Nothing
2863	2863	in this subsection shall be deemed to exempt the purchase of any
2864	2864	construction machinery, equipment or tools used in the constructing,
2865	2865	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
2866	2866	remodeling facilities for any such clinic or center. When any such clinic or
2867	2867	center shall contract for the purpose of constructing, equipping,
2868	2868	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
2869	2869	facilities, it shall obtain from the state and furnish to the contractor an
2870	2870	exemption certificate for the project involved, and the contractor may
2871	2871	purchase materials for incorporation in such project. The contractor shall
2872	2872	furnish the number of such certificate to all suppliers from whom such
2873	2873	purchases are made, and such suppliers shall execute invoices covering the
2874	2874	same bearing the number of such certificate. Upon completion of the
2875	2875	project the contractor shall furnish to such clinic or center concerned a
2876	2876	sworn statement, on a form to be provided by the director of taxation, that
2877	2877	all purchases so made were entitled to exemption under this subsection.
2878	2878	All invoices shall be held by the contractor for a period of five years and
2879	2879	shall be subject to audit by the director of taxation. If any materials
2880	2880	purchased under such a certificate are found not to have been incorporated
2881	2881	in the building or other project or not to have been returned for credit or
2882	2882	the sales or compensating tax otherwise imposed upon such materials that
2883	2883	will not be so incorporated in the building or other project reported and
2884	2884	1
2885	2885	2
2886	2886	3
2887	2887	4
2888	2888	5
2889	2889	6
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2923	2923	40
2924	2924	41
2925	2925	42
2926	2926	43 HB 2038 35
2927	2927	paid by such contractor to the director of taxation not later than the 20
2928	2928	th
2929	2929	day of the month following the close of the month in which it shall be
2930	2930	determined that such materials will not be used for the purpose for which
2931	2931	such certificate was issued, such clinic or center concerned shall be liable
2932	2932	for tax on all materials purchased for the project, and upon payment
2933	2933	thereof it may recover the same from the contractor together with
2934	2934	reasonable attorney fees. Any contractor or any agent, employee or
2935	2935	subcontractor thereof, who shall use or otherwise dispose of any materials
2936	2936	purchased under such a certificate for any purpose other than that for
2937	2937	which such a certificate is issued without the payment of the sales or
2938	2938	compensating tax otherwise imposed upon such materials, shall be guilty
2939	2939	of a misdemeanor and, upon conviction therefor, shall be subject to the
2940	2940	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
2941	2941	(ddd) on and after January 1, 1999, and before January 1, 2000, all
2942	2942	sales of materials and services purchased by any class II or III railroad as
2943	2943	classified by the federal surface transportation board for the construction,
2944	2944	renovation, repair or replacement of class II or III railroad track and
2945	2945	facilities used directly in interstate commerce. In the event any such track
2946	2946	or facility for which materials and services were purchased sales tax
2947	2947	exempt is not operational for five years succeeding the allowance of such
2948	2948	exemption, the total amount of sales tax that would have been payable
2949	2949	except for the operation of this subsection shall be recouped in accordance
2950	2950	with rules and regulations adopted for such purpose by the secretary of
2951	2951	revenue;
2952	2952	(eee) on and after January 1, 1999, and before January 1, 2001, all
2953	2953	sales of materials and services purchased for the original construction,
2954	2954	reconstruction, repair or replacement of grain storage facilities, including
2955	2955	railroad sidings providing access thereto;
2956	2956	(fff) all sales of material handling equipment, racking systems and
2957	2957	other related machinery and equipment that is used for the handling,
2958	2958	movement or storage of tangible personal property in a warehouse or
2959	2959	distribution facility in this state; all sales of installation, repair and
2960	2960	maintenance services performed on such machinery and equipment; and
2961	2961	all sales of repair and replacement parts for such machinery and
2962	2962	equipment. For purposes of this subsection, a warehouse or distribution
2963	2963	facility means a single, fixed location that consists of buildings or
2964	2964	structures in a contiguous area where storage or distribution operations are
2965	2965	conducted that are separate and apart from the business' retail operations,
2966	2966	if any, and that do not otherwise qualify for exemption as occurring at a
2967	2967	manufacturing or processing plant or facility. Material handling and
2968	2968	storage equipment shall include aeration, dust control, cleaning, handling
2969	2969	and other such equipment that is used in a public grain warehouse or other
2970	2970	commercial grain storage facility, whether used for grain handling, grain
2971	2971	1
2972	2972	2
2973	2973	3
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2998	2998	28
2999	2999	29
3000	3000	30
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3002	3002	32
3003	3003	33
3004	3004	34
3005	3005	35
3006	3006	36
3007	3007	37
3008	3008	38
3009	3009	39
3010	3010	40
3011	3011	41
3012	3012	42
3013	3013	43 HB 2038 36
3014	3014	storage, grain refining or processing, or other grain treatment operation;
3015	3015	(ggg) all sales of tangible personal property and services purchased
3016	3016	by or on behalf of the Kansas academy of science, which is exempt from
3017	3017	federal income taxation pursuant to section 501(c)(3) of the federal
3018	3018	internal revenue code of 1986, and used solely by such academy for the
3019	3019	preparation, publication and dissemination of education materials;
3020	3020	(hhh) all sales of tangible personal property and services purchased
3021	3021	by or on behalf of all domestic violence shelters that are member agencies
3022	3022	of the Kansas coalition against sexual and domestic violence;
3023	3023	(iii) all sales of personal property and services purchased by an
3024	3024	organization that is exempt from federal income taxation pursuant to
3025	3025	section 501(c)(3) of the federal internal revenue code of 1986, and such
3026	3026	personal property and services are used by any such organization in the
3027	3027	collection, storage and distribution of food products to nonprofit
3028	3028	organizations that distribute such food products to persons pursuant to a
3029	3029	food distribution program on a charitable basis without fee or charge, and
3030	3030	all sales of tangible personal property or services purchased by a
3031	3031	contractor for the purpose of constructing, equipping, reconstructing,
3032	3032	maintaining, repairing, enlarging, furnishing or remodeling facilities used
3033	3033	for the collection and storage of such food products for any such
3034	3034	organization which is exempt from federal income taxation pursuant to
3035	3035	section 501(c)(3) of the federal internal revenue code of 1986, that would
3036	3036	be exempt from taxation under the provisions of this section if purchased
3037	3037	directly by such organization. Nothing in this subsection shall be deemed
3038	3038	to exempt the purchase of any construction machinery, equipment or tools
3039	3039	used in the constructing, equipping, reconstructing, maintaining, repairing,
3040	3040	enlarging, furnishing or remodeling facilities for any such organization.
3041	3041	When any such organization shall contract for the purpose of constructing,
3042	3042	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3043	3043	remodeling facilities, it shall obtain from the state and furnish to the
3044	3044	contractor an exemption certificate for the project involved, and the
3045	3045	contractor may purchase materials for incorporation in such project. The
3046	3046	contractor shall furnish the number of such certificate to all suppliers from
3047	3047	whom such purchases are made, and such suppliers shall execute invoices
3048	3048	covering the same bearing the number of such certificate. Upon
3049	3049	completion of the project the contractor shall furnish to such organization
3050	3050	concerned a sworn statement, on a form to be provided by the director of
3051	3051	taxation, that all purchases so made were entitled to exemption under this
3052	3052	subsection. All invoices shall be held by the contractor for a period of five
3053	3053	years and shall be subject to audit by the director of taxation. If any
3054	3054	materials purchased under such a certificate are found not to have been
3055	3055	incorporated in such facilities or not to have been returned for credit or the
3056	3056	sales or compensating tax otherwise imposed upon such materials that will
3057	3057	1
3058	3058	2
3059	3059	3
3060	3060	4
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3096	3096	40
3097	3097	41
3098	3098	42
3099	3099	43 HB 2038 37
3100	3100	not be so incorporated in such facilities reported and paid by such
3101	3101	contractor to the director of taxation not later than the 20
3102	3102	th
3103	3103	day of the
3104	3104	month following the close of the month in which it shall be determined
3105	3105	that such materials will not be used for the purpose for which such
3106	3106	certificate was issued, such organization concerned shall be liable for tax
3107	3107	on all materials purchased for the project, and upon payment thereof it
3108	3108	may recover the same from the contractor together with reasonable
3109	3109	attorney fees. Any contractor or any agent, employee or subcontractor
3110	3110	thereof, who shall use or otherwise dispose of any materials purchased
3111	3111	under such a certificate for any purpose other than that for which such a
3112	3112	certificate is issued without the payment of the sales or compensating tax
3113	3113	otherwise imposed upon such materials, shall be guilty of a misdemeanor
3114	3114	and, upon conviction therefor, shall be subject to the penalties provided for
3115	3115	in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and after
3116	3116	July 1, 2005, but prior to the effective date of this act upon the gross
3117	3117	receipts received from any sale exempted by the amendatory provisions of
3118	3118	this subsection shall be refunded. Each claim for a sales tax refund shall be
3119	3119	verified and submitted to the director of taxation upon forms furnished by
3120	3120	the director and shall be accompanied by any additional documentation
3121	3121	required by the director. The director shall review each claim and shall
3122	3122	refund that amount of sales tax paid as determined under the provisions of
3123	3123	this subsection. All refunds shall be paid from the sales tax refund fund
3124	3124	upon warrants of the director of accounts and reports pursuant to vouchers
3125	3125	approved by the director or the director's designee;
3126	3126	(jjj) all sales of dietary supplements dispensed pursuant to a
3127	3127	prescription order by a licensed practitioner or a mid-level practitioner as
3128	3128	defined by K.S.A. 65-1626, and amendments thereto. As used in this
3129	3129	subsection, "dietary supplement" means any product, other than tobacco,
3130	3130	intended to supplement the diet that: (1) Contains one or more of the
3131	3131	following dietary ingredients: A vitamin, a mineral, an herb or other
3132	3132	botanical, an amino acid, a dietary substance for use by humans to
3133	3133	supplement the diet by increasing the total dietary intake or a concentrate,
3134	3134	metabolite, constituent, extract or combination of any such ingredient; (2)
3135	3135	is intended for ingestion in tablet, capsule, powder, softgel, gelcap or
3136	3136	liquid form, or if not intended for ingestion, in such a form, is not
3137	3137	represented as conventional food and is not represented for use as a sole
3138	3138	item of a meal or of the diet; and (3) is required to be labeled as a dietary
3139	3139	supplement, identifiable by the supplemental facts box found on the label
3140	3140	and as required pursuant to 21 C.F.R. § 101.36;
3141	3141	(lll) all sales of tangible personal property and services purchased by
3142	3142	special olympics Kansas, inc. for the purpose of providing year-round
3143	3143	sports training and athletic competition in a variety of olympic-type sports
3144	3144	for individuals with intellectual disabilities by giving them continuing
3145	3145	1
3146	3146	2
3147	3147	3
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3149	3149	5
3150	3150	6
3151	3151	7
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3156	3156	12
3157	3157	13
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3160	3160	16
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3163	3163	19
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3169	3169	25
3170	3170	26
3171	3171	27
3172	3172	28
3173	3173	29
3174	3174	30
3175	3175	31
3176	3176	32
3177	3177	33
3178	3178	34
3179	3179	35
3180	3180	36
3181	3181	37
3182	3182	38
3183	3183	39
3184	3184	40
3185	3185	41
3186	3186	42
3187	3187	43 HB 2038 38
3188	3188	opportunities to develop physical fitness, demonstrate courage, experience
3189	3189	joy and participate in a sharing of gifts, skills and friendship with their
3190	3190	families, other special olympics athletes and the community, and activities
3191	3191	provided or sponsored by such organization, and all sales of tangible
3192	3192	personal property by or on behalf of any such organization;
3193	3193	(mmm) all sales of tangible personal property purchased by or on
3194	3194	behalf of the Marillac center, inc., which is exempt from federal income
3195	3195	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3196	3196	for the purpose of providing psycho-social-biological and special
3197	3197	education services to children, and all sales of any such property by or on
3198	3198	behalf of such organization for such purpose;
3199	3199	(nnn) all sales of tangible personal property and services purchased
3200	3200	by the west Sedgwick county-sunrise rotary club and sunrise charitable
3201	3201	fund for the purpose of constructing a boundless playground which is an
3202	3202	integrated, barrier free and developmentally advantageous play
3203	3203	environment for children of all abilities and disabilities;
3204	3204	(ooo) all sales of tangible personal property by or on behalf of a
3205	3205	public library serving the general public and supported in whole or in part
3206	3206	with tax money or a not-for-profit organization whose purpose is to raise
3207	3207	funds for or provide services or other benefits to any such public library;
3208	3208	(ppp) all sales of tangible personal property and services purchased
3209	3209	by or on behalf of a homeless shelter that is exempt from federal income
3210	3210	taxation pursuant to section 501(c)(3) of the federal income tax code of
3211	3211	1986, and used by any such homeless shelter to provide emergency and
3212	3212	transitional housing for individuals and families experiencing
3213	3213	homelessness, and all sales of any such property by or on behalf of any
3214	3214	such homeless shelter for any such purpose;
3215	3215	(qqq) all sales of tangible personal property and services purchased
3216	3216	by TLC for children and families, inc., hereinafter referred to as TLC,
3217	3217	which is exempt from federal income taxation pursuant to section 501(c)
3218	3218	(3) of the federal internal revenue code of 1986, and such property and
3219	3219	services are used for the purpose of providing emergency shelter and
3220	3220	treatment for abused and neglected children as well as meeting additional
3221	3221	critical needs for children, juveniles and family, and all sales of any such
3222	3222	property by or on behalf of TLC for any such purpose; and all sales of
3223	3223	tangible personal property or services purchased by a contractor for the
3224	3224	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3225	3225	remodeling facilities for the operation of services for TLC for any such
3226	3226	purpose that would be exempt from taxation under the provisions of this
3227	3227	section if purchased directly by TLC. Nothing in this subsection shall be
3228	3228	deemed to exempt the purchase of any construction machinery, equipment
3229	3229	or tools used in the constructing, maintaining, repairing, enlarging,
3230	3230	furnishing or remodeling such facilities for TLC. When TLC contracts for
3231	3231	1
3232	3232	2
3233	3233	3
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3236	3236	6
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3255	3255	25
3256	3256	26
3257	3257	27
3258	3258	28
3259	3259	29
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3262	3262	32
3263	3263	33
3264	3264	34
3265	3265	35
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3267	3267	37
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3270	3270	40
3271	3271	41
3272	3272	42
3273	3273	43 HB 2038 39
3274	3274	the purpose of constructing, maintaining, repairing, enlarging, furnishing
3275	3275	or remodeling such facilities, it shall obtain from the state and furnish to
3276	3276	the contractor an exemption certificate for the project involved, and the
3277	3277	contractor may purchase materials for incorporation in such project. The
3278	3278	contractor shall furnish the number of such certificate to all suppliers from
3279	3279	whom such purchases are made, and such suppliers shall execute invoices
3280	3280	covering the same bearing the number of such certificate. Upon
3281	3281	completion of the project the contractor shall furnish to TLC a sworn
3282	3282	statement, on a form to be provided by the director of taxation, that all
3283	3283	purchases so made were entitled to exemption under this subsection. All
3284	3284	invoices shall be held by the contractor for a period of five years and shall
3285	3285	be subject to audit by the director of taxation. If any materials purchased
3286	3286	under such a certificate are found not to have been incorporated in the
3287	3287	building or other project or not to have been returned for credit or the sales
3288	3288	or compensating tax otherwise imposed upon such materials that will not
3289	3289	be so incorporated in the building or other project reported and paid by
3290	3290	such contractor to the director of taxation not later than the 20
3291	3291	th
3292	3292	day of the
3293	3293	month following the close of the month in which it shall be determined
3294	3294	that such materials will not be used for the purpose for which such
3295	3295	certificate was issued, TLC shall be liable for tax on all materials
3296	3296	purchased for the project, and upon payment thereof it may recover the
3297	3297	same from the contractor together with reasonable attorney fees. Any
3298	3298	contractor or any agent, employee or subcontractor thereof, who shall use
3299	3299	or otherwise dispose of any materials purchased under such a certificate
3300	3300	for any purpose other than that for which such a certificate is issued
3301	3301	without the payment of the sales or compensating tax otherwise imposed
3302	3302	upon such materials, shall be guilty of a misdemeanor and, upon
3303	3303	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3304	3304	79-3615(h), and amendments thereto;
3305	3305	(rrr) all sales of tangible personal property and services purchased by
3306	3306	any county law library maintained pursuant to law and sales of tangible
3307	3307	personal property and services purchased by an organization that would
3308	3308	have been exempt from taxation under the provisions of this subsection if
3309	3309	purchased directly by the county law library for the purpose of providing
3310	3310	legal resources to attorneys, judges, students and the general public, and
3311	3311	all sales of any such property by or on behalf of any such county law
3312	3312	library;
3313	3313	(sss) all sales of tangible personal property and services purchased by
3314	3314	catholic charities or youthville, hereinafter referred to as charitable family
3315	3315	providers, which is exempt from federal income taxation pursuant to
3316	3316	section 501(c)(3) of the federal internal revenue code of 1986, and which
3317	3317	such property and services are used for the purpose of providing
3318	3318	emergency shelter and treatment for abused and neglected children as well
3319	3319	1
3320	3320	2
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3330	3330	12
3331	3331	13
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3333	3333	15
3334	3334	16
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3337	3337	19
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3339	3339	21
3340	3340	22
3341	3341	23
3342	3342	24
3343	3343	25
3344	3344	26
3345	3345	27
3346	3346	28
3347	3347	29
3348	3348	30
3349	3349	31
3350	3350	32
3351	3351	33
3352	3352	34
3353	3353	35
3354	3354	36
3355	3355	37
3356	3356	38
3357	3357	39
3358	3358	40
3359	3359	41
3360	3360	42
3361	3361	43 HB 2038 40
3362	3362	as meeting additional critical needs for children, juveniles and family, and
3363	3363	all sales of any such property by or on behalf of charitable family
3364	3364	providers for any such purpose; and all sales of tangible personal property
3365	3365	or services purchased by a contractor for the purpose of constructing,
3366	3366	maintaining, repairing, enlarging, furnishing or remodeling facilities for
3367	3367	the operation of services for charitable family providers for any such
3368	3368	purpose which would be exempt from taxation under the provisions of this
3369	3369	section if purchased directly by charitable family providers. Nothing in
3370	3370	this subsection shall be deemed to exempt the purchase of any construction
3371	3371	machinery, equipment or tools used in the constructing, maintaining,
3372	3372	repairing, enlarging, furnishing or remodeling such facilities for charitable
3373	3373	family providers. When charitable family providers contracts for the
3374	3374	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3375	3375	remodeling such facilities, it shall obtain from the state and furnish to the
3376	3376	contractor an exemption certificate for the project involved, and the
3377	3377	contractor may purchase materials for incorporation in such project. The
3378	3378	contractor shall furnish the number of such certificate to all suppliers from
3379	3379	whom such purchases are made, and such suppliers shall execute invoices
3380	3380	covering the same bearing the number of such certificate. Upon
3381	3381	completion of the project the contractor shall furnish to charitable family
3382	3382	providers a sworn statement, on a form to be provided by the director of
3383	3383	taxation, that all purchases so made were entitled to exemption under this
3384	3384	subsection. All invoices shall be held by the contractor for a period of five
3385	3385	years and shall be subject to audit by the director of taxation. If any
3386	3386	materials purchased under such a certificate are found not to have been
3387	3387	incorporated in the building or other project or not to have been returned
3388	3388	for credit or the sales or compensating tax otherwise imposed upon such
3389	3389	materials that will not be so incorporated in the building or other project
3390	3390	reported and paid by such contractor to the director of taxation not later
3391	3391	than the 20
3392	3392	th
3393	3393	day of the month following the close of the month in which it
3394	3394	shall be determined that such materials will not be used for the purpose for
3395	3395	which such certificate was issued, charitable family providers shall be
3396	3396	liable for tax on all materials purchased for the project, and upon payment
3397	3397	thereof it may recover the same from the contractor together with
3398	3398	reasonable attorney fees. Any contractor or any agent, employee or
3399	3399	subcontractor thereof, who shall use or otherwise dispose of any materials
3400	3400	purchased under such a certificate for any purpose other than that for
3401	3401	which such a certificate is issued without the payment of the sales or
3402	3402	compensating tax otherwise imposed upon such materials, shall be guilty
3403	3403	of a misdemeanor and, upon conviction therefor, shall be subject to the
3404	3404	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3405	3405	(ttt) all sales of tangible personal property or services purchased by a
3406	3406	contractor for a project for the purpose of restoring, constructing,
3407	3407	1
3408	3408	2
3409	3409	3
3410	3410	4
3411	3411	5
3412	3412	6
3413	3413	7
3414	3414	8
3415	3415	9
3416	3416	10
3417	3417	11
3418	3418	12
3419	3419	13
3420	3420	14
3421	3421	15
3422	3422	16
3423	3423	17
3424	3424	18
3425	3425	19
3426	3426	20
3427	3427	21
3428	3428	22
3429	3429	23
3430	3430	24
3431	3431	25
3432	3432	26
3433	3433	27
3434	3434	28
3435	3435	29
3436	3436	30
3437	3437	31
3438	3438	32
3439	3439	33
3440	3440	34
3441	3441	35
3442	3442	36
3443	3443	37
3444	3444	38
3445	3445	39
3446	3446	40
3447	3447	41
3448	3448	42
3449	3449	43 HB 2038 41
3450	3450	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3451	3451	remodeling a home or facility owned by a nonprofit museum that has been
3452	3452	granted an exemption pursuant to subsection (qq), which such home or
3453	3453	facility is located in a city that has been designated as a qualified
3454	3454	hometown pursuant to the provisions of K.S.A. 75-5071 et seq., and
3455	3455	amendments thereto, and which such project is related to the purposes of
3456	3456	K.S.A. 75-5071 et seq., and amendments thereto, and that would be
3457	3457	exempt from taxation under the provisions of this section if purchased
3458	3458	directly by such nonprofit museum. Nothing in this subsection shall be
3459	3459	deemed to exempt the purchase of any construction machinery, equipment
3460	3460	or tools used in the restoring, constructing, equipping, reconstructing,
3461	3461	maintaining, repairing, enlarging, furnishing or remodeling a home or
3462	3462	facility for any such nonprofit museum. When any such nonprofit museum
3463	3463	shall contract for the purpose of restoring, constructing, equipping,
3464	3464	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3465	3465	a home or facility, it shall obtain from the state and furnish to the
3466	3466	contractor an exemption certificate for the project involved, and the
3467	3467	contractor may purchase materials for incorporation in such project. The
3468	3468	contractor shall furnish the number of such certificates to all suppliers
3469	3469	from whom such purchases are made, and such suppliers shall execute
3470	3470	invoices covering the same bearing the number of such certificate. Upon
3471	3471	completion of the project, the contractor shall furnish to such nonprofit
3472	3472	museum a sworn statement on a form to be provided by the director of
3473	3473	taxation that all purchases so made were entitled to exemption under this
3474	3474	subsection. All invoices shall be held by the contractor for a period of five
3475	3475	years and shall be subject to audit by the director of taxation. If any
3476	3476	materials purchased under such a certificate are found not to have been
3477	3477	incorporated in the building or other project or not to have been returned
3478	3478	for credit or the sales or compensating tax otherwise imposed upon such
3479	3479	materials that will not be so incorporated in a home or facility or other
3480	3480	project reported and paid by such contractor to the director of taxation not
3481	3481	later than the 20
3482	3482	th
3483	3483	day of the month following the close of the month in
3484	3484	which it shall be determined that such materials will not be used for the
3485	3485	purpose for which such certificate was issued, such nonprofit museum
3486	3486	shall be liable for tax on all materials purchased for the project, and upon
3487	3487	payment thereof it may recover the same from the contractor together with
3488	3488	reasonable attorney fees. Any contractor or any agent, employee or
3489	3489	subcontractor thereof, who shall use or otherwise dispose of any materials
3490	3490	purchased under such a certificate for any purpose other than that for
3491	3491	which such a certificate is issued without the payment of the sales or
3492	3492	compensating tax otherwise imposed upon such materials, shall be guilty
3493	3493	of a misdemeanor and, upon conviction therefor, shall be subject to the
3494	3494	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3495	3495	1
3496	3496	2
3497	3497	3
3498	3498	4
3499	3499	5
3500	3500	6
3501	3501	7
3502	3502	8
3503	3503	9
3504	3504	10
3505	3505	11
3506	3506	12
3507	3507	13
3508	3508	14
3509	3509	15
3510	3510	16
3511	3511	17
3512	3512	18
3513	3513	19
3514	3514	20
3515	3515	21
3516	3516	22
3517	3517	23
3518	3518	24
3519	3519	25
3520	3520	26
3521	3521	27
3522	3522	28
3523	3523	29
3524	3524	30
3525	3525	31
3526	3526	32
3527	3527	33
3528	3528	34
3529	3529	35
3530	3530	36
3531	3531	37
3532	3532	38
3533	3533	39
3534	3534	40
3535	3535	41
3536	3536	42
3537	3537	43 HB 2038 42
3538	3538	(uuu) all sales of tangible personal property and services purchased
3539	3539	by Kansas children's service league, hereinafter referred to as KCSL,
3540	3540	which is exempt from federal income taxation pursuant to section 501(c)
3541	3541	(3) of the federal internal revenue code of 1986, and which such property
3542	3542	and services are used for the purpose of providing for the prevention and
3543	3543	treatment of child abuse and maltreatment as well as meeting additional
3544	3544	critical needs for children, juveniles and family, and all sales of any such
3545	3545	property by or on behalf of KCSL for any such purpose; and all sales of
3546	3546	tangible personal property or services purchased by a contractor for the
3547	3547	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3548	3548	remodeling facilities for the operation of services for KCSL for any such
3549	3549	purpose that would be exempt from taxation under the provisions of this
3550	3550	section if purchased directly by KCSL. Nothing in this subsection shall be
3551	3551	deemed to exempt the purchase of any construction machinery, equipment
3552	3552	or tools used in the constructing, maintaining, repairing, enlarging,
3553	3553	furnishing or remodeling such facilities for KCSL. When KCSL contracts
3554	3554	for the purpose of constructing, maintaining, repairing, enlarging,
3555	3555	furnishing or remodeling such facilities, it shall obtain from the state and
3556	3556	furnish to the contractor an exemption certificate for the project involved,
3557	3557	and the contractor may purchase materials for incorporation in such
3558	3558	project. The contractor shall furnish the number of such certificate to all
3559	3559	suppliers from whom such purchases are made, and such suppliers shall
3560	3560	execute invoices covering the same bearing the number of such certificate.
3561	3561	Upon completion of the project the contractor shall furnish to KCSL a
3562	3562	sworn statement, on a form to be provided by the director of taxation, that
3563	3563	all purchases so made were entitled to exemption under this subsection.
3564	3564	All invoices shall be held by the contractor for a period of five years and
3565	3565	shall be subject to audit by the director of taxation. If any materials
3566	3566	purchased under such a certificate are found not to have been incorporated
3567	3567	in the building or other project or not to have been returned for credit or
3568	3568	the sales or compensating tax otherwise imposed upon such materials that
3569	3569	will not be so incorporated in the building or other project reported and
3570	3570	paid by such contractor to the director of taxation not later than the 20
3571	3571	th
3572	3572	day of the month following the close of the month in which it shall be
3573	3573	determined that such materials will not be used for the purpose for which
3574	3574	such certificate was issued, KCSL shall be liable for tax on all materials
3575	3575	purchased for the project, and upon payment thereof it may recover the
3576	3576	same from the contractor together with reasonable attorney fees. Any
3577	3577	contractor or any agent, employee or subcontractor thereof, who shall use
3578	3578	or otherwise dispose of any materials purchased under such a certificate
3579	3579	for any purpose other than that for which such a certificate is issued
3580	3580	without the payment of the sales or compensating tax otherwise imposed
3581	3581	upon such materials, shall be guilty of a misdemeanor and, upon
3582	3582	1
3583	3583	2
3584	3584	3
3585	3585	4
3586	3586	5
3587	3587	6
3588	3588	7
3589	3589	8
3590	3590	9
3591	3591	10
3592	3592	11
3593	3593	12
3594	3594	13
3595	3595	14
3596	3596	15
3597	3597	16
3598	3598	17
3599	3599	18
3600	3600	19
3601	3601	20
3602	3602	21
3603	3603	22
3604	3604	23
3605	3605	24
3606	3606	25
3607	3607	26
3608	3608	27
3609	3609	28
3610	3610	29
3611	3611	30
3612	3612	31
3613	3613	32
3614	3614	33
3615	3615	34
3616	3616	35
3617	3617	36
3618	3618	37
3619	3619	38
3620	3620	39
3621	3621	40
3622	3622	41
3623	3623	42
3624	3624	43 HB 2038 43
3625	3625	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3626	3626	79-3615(h), and amendments thereto;
3627	3627	(vvv) all sales of tangible personal property or services, including the
3628	3628	renting and leasing of tangible personal property or services, purchased by
3629	3629	jazz in the woods, inc., a Kansas corporation that is exempt from federal
3630	3630	income taxation pursuant to section 501(c)(3) of the federal internal
3631	3631	revenue code, for the purpose of providing jazz in the woods, an event
3632	3632	benefiting children-in-need and other nonprofit charities assisting such
3633	3633	children, and all sales of any such property by or on behalf of such
3634	3634	organization for such purpose;
3635	3635	(www) all sales of tangible personal property purchased by or on
3636	3636	behalf of the Frontenac education foundation, which is exempt from
3637	3637	federal income taxation pursuant to section 501(c)(3) of the federal
3638	3638	internal revenue code, for the purpose of providing education support for
3639	3639	students, and all sales of any such property by or on behalf of such
3640	3640	organization for such purpose;
3641	3641	(xxx) all sales of personal property and services purchased by the
3642	3642	booth theatre foundation, inc., an organization, which is exempt from
3643	3643	federal income taxation pursuant to section 501(c)(3) of the federal
3644	3644	internal revenue code of 1986, and which such personal property and
3645	3645	services are used by any such organization in the constructing, equipping,
3646	3646	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3647	3647	of the booth theatre, and all sales of tangible personal property or services
3648	3648	purchased by a contractor for the purpose of constructing, equipping,
3649	3649	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3650	3650	the booth theatre for such organization, that would be exempt from
3651	3651	taxation under the provisions of this section if purchased directly by such
3652	3652	organization. Nothing in this subsection shall be deemed to exempt the
3653	3653	purchase of any construction machinery, equipment or tools used in the
3654	3654	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
3655	3655	furnishing or remodeling facilities for any such organization. When any
3656	3656	such organization shall contract for the purpose of constructing, equipping,
3657	3657	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3658	3658	facilities, it shall obtain from the state and furnish to the contractor an
3659	3659	exemption certificate for the project involved, and the contractor may
3660	3660	purchase materials for incorporation in such project. The contractor shall
3661	3661	furnish the number of such certificate to all suppliers from whom such
3662	3662	purchases are made, and such suppliers shall execute invoices covering the
3663	3663	same bearing the number of such certificate. Upon completion of the
3664	3664	project the contractor shall furnish to such organization concerned a sworn
3665	3665	statement, on a form to be provided by the director of taxation, that all
3666	3666	purchases so made were entitled to exemption under this subsection. All
3667	3667	invoices shall be held by the contractor for a period of five years and shall
3668	3668	1
3669	3669	2
3670	3670	3
3671	3671	4
3672	3672	5
3673	3673	6
3674	3674	7
3675	3675	8
3676	3676	9
3677	3677	10
3678	3678	11
3679	3679	12
3680	3680	13
3681	3681	14
3682	3682	15
3683	3683	16
3684	3684	17
3685	3685	18
3686	3686	19
3687	3687	20
3688	3688	21
3689	3689	22
3690	3690	23
3691	3691	24
3692	3692	25
3693	3693	26
3694	3694	27
3695	3695	28
3696	3696	29
3697	3697	30
3698	3698	31
3699	3699	32
3700	3700	33
3701	3701	34
3702	3702	35
3703	3703	36
3704	3704	37
3705	3705	38
3706	3706	39
3707	3707	40
3708	3708	41
3709	3709	42
3710	3710	43 HB 2038 44
3711	3711	be subject to audit by the director of taxation. If any materials purchased
3712	3712	under such a certificate are found not to have been incorporated in such
3713	3713	facilities or not to have been returned for credit or the sales or
3714	3714	compensating tax otherwise imposed upon such materials that will not be
3715	3715	so incorporated in such facilities reported and paid by such contractor to
3716	3716	the director of taxation not later than the 20
3717	3717	th
3718	3718	day of the month following
3719	3719	the close of the month in which it shall be determined that such materials
3720	3720	will not be used for the purpose for which such certificate was issued, such
3721	3721	organization concerned shall be liable for tax on all materials purchased
3722	3722	for the project, and upon payment thereof it may recover the same from
3723	3723	the contractor together with reasonable attorney fees. Any contractor or
3724	3724	any agent, employee or subcontractor thereof, who shall use or otherwise
3725	3725	dispose of any materials purchased under such a certificate for any purpose
3726	3726	other than that for which such a certificate is issued without the payment
3727	3727	of the sales or compensating tax otherwise imposed upon such materials,
3728	3728	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
3729	3729	subject to the penalties provided for in K.S.A. 79-3615(h), and
3730	3730	amendments thereto. Sales tax paid on and after January 1, 2007, but prior
3731	3731	to the effective date of this act upon the gross receipts received from any
3732	3732	sale which would have been exempted by the provisions of this subsection
3733	3733	had such sale occurred after the effective date of this act shall be refunded.
3734	3734	Each claim for a sales tax refund shall be verified and submitted to the
3735	3735	director of taxation upon forms furnished by the director and shall be
3736	3736	accompanied by any additional documentation required by the director.
3737	3737	The director shall review each claim and shall refund that amount of sales
3738	3738	tax paid as determined under the provisions of this subsection. All refunds
3739	3739	shall be paid from the sales tax refund fund upon warrants of the director
3740	3740	of accounts and reports pursuant to vouchers approved by the director or
3741	3741	the director's designee;
3742	3742	(yyy) all sales of tangible personal property and services purchased
3743	3743	by TLC charities foundation, inc., hereinafter referred to as TLC charities,
3744	3744	which is exempt from federal income taxation pursuant to section 501(c)
3745	3745	(3) of the federal internal revenue code of 1986, and which such property
3746	3746	and services are used for the purpose of encouraging private philanthropy
3747	3747	to further the vision, values, and goals of TLC for children and families,
3748	3748	inc.; and all sales of such property and services by or on behalf of TLC
3749	3749	charities for any such purpose and all sales of tangible personal property or
3750	3750	services purchased by a contractor for the purpose of constructing,
3751	3751	maintaining, repairing, enlarging, furnishing or remodeling facilities for
3752	3752	the operation of services for TLC charities for any such purpose that would
3753	3753	be exempt from taxation under the provisions of this section if purchased
3754	3754	directly by TLC charities. Nothing in this subsection shall be deemed to
3755	3755	exempt the purchase of any construction machinery, equipment or tools
3756	3756	1
3757	3757	2
3758	3758	3
3759	3759	4
3760	3760	5
3761	3761	6
3762	3762	7
3763	3763	8
3764	3764	9
3765	3765	10
3766	3766	11
3767	3767	12
3768	3768	13
3769	3769	14
3770	3770	15
3771	3771	16
3772	3772	17
3773	3773	18
3774	3774	19
3775	3775	20
3776	3776	21
3777	3777	22
3778	3778	23
3779	3779	24
3780	3780	25
3781	3781	26
3782	3782	27
3783	3783	28
3784	3784	29
3785	3785	30
3786	3786	31
3787	3787	32
3788	3788	33
3789	3789	34
3790	3790	35
3791	3791	36
3792	3792	37
3793	3793	38
3794	3794	39
3795	3795	40
3796	3796	41
3797	3797	42
3798	3798	43 HB 2038 45
3799	3799	used in the constructing, maintaining, repairing, enlarging, furnishing or
3800	3800	remodeling such facilities for TLC charities. When TLC charities contracts
3801	3801	for the purpose of constructing, maintaining, repairing, enlarging,
3802	3802	furnishing or remodeling such facilities, it shall obtain from the state and
3803	3803	furnish to the contractor an exemption certificate for the project involved,
3804	3804	and the contractor may purchase materials for incorporation in such
3805	3805	project. The contractor shall furnish the number of such certificate to all
3806	3806	suppliers from whom such purchases are made, and such suppliers shall
3807	3807	execute invoices covering the same bearing the number of such certificate.
3808	3808	Upon completion of the project the contractor shall furnish to TLC
3809	3809	charities a sworn statement, on a form to be provided by the director of
3810	3810	taxation, that all purchases so made were entitled to exemption under this
3811	3811	subsection. All invoices shall be held by the contractor for a period of five
3812	3812	years and shall be subject to audit by the director of taxation. If any
3813	3813	materials purchased under such a certificate are found not to have been
3814	3814	incorporated in the building or other project or not to have been returned
3815	3815	for credit or the sales or compensating tax otherwise imposed upon such
3816	3816	materials that will not be incorporated into the building or other project
3817	3817	reported and paid by such contractor to the director of taxation not later
3818	3818	than the 20
3819	3819	th
3820	3820	day of the month following the close of the month in which it
3821	3821	shall be determined that such materials will not be used for the purpose for
3822	3822	which such certificate was issued, TLC charities shall be liable for tax on
3823	3823	all materials purchased for the project, and upon payment thereof it may
3824	3824	recover the same from the contractor together with reasonable attorney
3825	3825	fees. Any contractor or any agent, employee or subcontractor thereof, who
3826	3826	shall use or otherwise dispose of any materials purchased under such a
3827	3827	certificate for any purpose other than that for which such a certificate is
3828	3828	issued without the payment of the sales or compensating tax otherwise
3829	3829	imposed upon such materials, shall be guilty of a misdemeanor and, upon
3830	3830	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3831	3831	79-3615(h), and amendments thereto;
3832	3832	(zzz) all sales of tangible personal property purchased by the rotary
3833	3833	club of shawnee foundation, which is exempt from federal income taxation
3834	3834	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
3835	3835	as amended, used for the purpose of providing contributions to community
3836	3836	service organizations and scholarships;
3837	3837	(aaaa) all sales of personal property and services purchased by or on
3838	3838	behalf of victory in the valley, inc., which is exempt from federal income
3839	3839	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3840	3840	for the purpose of providing a cancer support group and services for
3841	3841	persons with cancer, and all sales of any such property by or on behalf of
3842	3842	any such organization for any such purpose;
3843	3843	(bbbb) all sales of entry or participation fees, charges or tickets by
3844	3844	1
3845	3845	2
3846	3846	3
3847	3847	4
3848	3848	5
3849	3849	6
3850	3850	7
3851	3851	8
3852	3852	9
3853	3853	10
3854	3854	11
3855	3855	12
3856	3856	13
3857	3857	14
3858	3858	15
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3868	3868	25
3869	3869	26
3870	3870	27
3871	3871	28
3872	3872	29
3873	3873	30
3874	3874	31
3875	3875	32
3876	3876	33
3877	3877	34
3878	3878	35
3879	3879	36
3880	3880	37
3881	3881	38
3882	3882	39
3883	3883	40
3884	3884	41
3885	3885	42
3886	3886	43 HB 2038 46
3887	3887	Guadalupe health foundation, which is exempt from federal income
3888	3888	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3889	3889	for such organization's annual fundraising event which purpose is to
3890	3890	provide health care services for uninsured workers;
3891	3891	(cccc) all sales of tangible personal property or services purchased by
3892	3892	or on behalf of wayside waifs, inc., which is exempt from federal income
3893	3893	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3894	3894	for the purpose of providing such organization's annual fundraiser, an
3895	3895	event whose purpose is to support the care of homeless and abandoned
3896	3896	animals, animal adoption efforts, education programs for children and
3897	3897	efforts to reduce animal over-population and animal welfare services, and
3898	3898	all sales of any such property, including entry or participation fees or
3899	3899	charges, by or on behalf of such organization for such purpose;
3900	3900	(dddd) all sales of tangible personal property or services purchased
3901	3901	by or on behalf of goodwill industries or Easter seals of Kansas, inc., both
3902	3902	of which are exempt from federal income taxation pursuant to section
3903	3903	501(c)(3) of the federal internal revenue code, for the purpose of providing
3904	3904	education, training and employment opportunities for people with
3905	3905	disabilities and other barriers to employment;
3906	3906	(eeee) all sales of tangible personal property or services purchased by
3907	3907	or on behalf of all American beef battalion, inc., which is exempt from
3908	3908	federal income taxation pursuant to section 501(c)(3) of the federal
3909	3909	internal revenue code, for the purpose of educating, promoting and
3910	3910	participating as a contact group through the beef cattle industry in order to
3911	3911	carry out such projects that provide support and morale to members of the
3912	3912	United States armed forces and military services;
3913	3913	(ffff) all sales of tangible personal property and services purchased by
3914	3914	sheltered living, inc., which is exempt from federal income taxation
3915	3915	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
3916	3916	and which such property and services are used for the purpose of
3917	3917	providing residential and day services for people with developmental
3918	3918	disabilities or intellectual disability, or both, and all sales of any such
3919	3919	property by or on behalf of sheltered living, inc., for any such purpose; and
3920	3920	all sales of tangible personal property or services purchased by a
3921	3921	contractor for the purpose of rehabilitating, constructing, maintaining,
3922	3922	repairing, enlarging, furnishing or remodeling homes and facilities for
3923	3923	sheltered living, inc., for any such purpose that would be exempt from
3924	3924	taxation under the provisions of this section if purchased directly by
3925	3925	sheltered living, inc. Nothing in this subsection shall be deemed to exempt
3926	3926	the purchase of any construction machinery, equipment or tools used in the
3927	3927	constructing, maintaining, repairing, enlarging, furnishing or remodeling
3928	3928	such homes and facilities for sheltered living, inc. When sheltered living,
3929	3929	inc., contracts for the purpose of rehabilitating, constructing, maintaining,
3930	3930	1
3931	3931	2
3932	3932	3
3933	3933	4
3934	3934	5
3935	3935	6
3936	3936	7
3937	3937	8
3938	3938	9
3939	3939	10
3940	3940	11
3941	3941	12
3942	3942	13
3943	3943	14
3944	3944	15
3945	3945	16
3946	3946	17
3947	3947	18
3948	3948	19
3949	3949	20
3950	3950	21
3951	3951	22
3952	3952	23
3953	3953	24
3954	3954	25
3955	3955	26
3956	3956	27
3957	3957	28
3958	3958	29
3959	3959	30
3960	3960	31
3961	3961	32
3962	3962	33
3963	3963	34
3964	3964	35
3965	3965	36
3966	3966	37
3967	3967	38
3968	3968	39
3969	3969	40
3970	3970	41
3971	3971	42
3972	3972	43 HB 2038 47
3973	3973	repairing, enlarging, furnishing or remodeling such homes and facilities, it
3974	3974	shall obtain from the state and furnish to the contractor an exemption
3975	3975	certificate for the project involved, and the contractor may purchase
3976	3976	materials for incorporation in such project. The contractor shall furnish the
3977	3977	number of such certificate to all suppliers from whom such purchases are
3978	3978	made, and such suppliers shall execute invoices covering the same bearing
3979	3979	the number of such certificate. Upon completion of the project the
3980	3980	contractor shall furnish to sheltered living, inc., a sworn statement, on a
3981	3981	form to be provided by the director of taxation, that all purchases so made
3982	3982	were entitled to exemption under this subsection. All invoices shall be held
3983	3983	by the contractor for a period of five years and shall be subject to audit by
3984	3984	the director of taxation. If any materials purchased under such a certificate
3985	3985	are found not to have been incorporated in the building or other project or
3986	3986	not to have been returned for credit or the sales or compensating tax
3987	3987	otherwise imposed upon such materials that will not be so incorporated in
3988	3988	the building or other project reported and paid by such contractor to the
3989	3989	director of taxation not later than the 20
3990	3990	th
3991	3991	day of the month following the
3992	3992	close of the month in which it shall be determined that such materials will
3993	3993	not be used for the purpose for which such certificate was issued, sheltered
3994	3994	living, inc., shall be liable for tax on all materials purchased for the
3995	3995	project, and upon payment thereof it may recover the same from the
3996	3996	contractor together with reasonable attorney fees. Any contractor or any
3997	3997	agent, employee or subcontractor thereof, who shall use or otherwise
3998	3998	dispose of any materials purchased under such a certificate for any purpose
3999	3999	other than that for which such a certificate is issued without the payment
4000	4000	of the sales or compensating tax otherwise imposed upon such materials,
4001	4001	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4002	4002	subject to the penalties provided for in K.S.A. 79-3615(h), and
4003	4003	amendments thereto;
4004	4004	(gggg) all sales of game birds for which the primary purpose is use in
4005	4005	hunting;
4006	4006	(hhhh) all sales of tangible personal property or services purchased
4007	4007	on or after July 1, 2014, for the purpose of and in conjunction with
4008	4008	constructing, reconstructing, enlarging or remodeling a business identified
4009	4009	under the North American industry classification system (NAICS)
4010	4010	subsectors 1123, 1124, 112112, 112120 or 112210, and the sale and
4011	4011	installation of machinery and equipment purchased for installation at any
4012	4012	such business. The exemption provided in this subsection shall not apply
4013	4013	to projects that have actual total costs less than $50,000. When a person
4014	4014	contracts for the construction, reconstruction, enlargement or remodeling
4015	4015	of any such business, such person shall obtain from the state and furnish to
4016	4016	the contractor an exemption certificate for the project involved, and the
4017	4017	contractor may purchase materials, machinery and equipment for
4018	4018	1
4019	4019	2
4020	4020	3
4021	4021	4
4022	4022	5
4023	4023	6
4024	4024	7
4025	4025	8
4026	4026	9
4027	4027	10
4028	4028	11
4029	4029	12
4030	4030	13
4031	4031	14
4032	4032	15
4033	4033	16
4034	4034	17
4035	4035	18
4036	4036	19
4037	4037	20
4038	4038	21
4039	4039	22
4040	4040	23
4041	4041	24
4042	4042	25
4043	4043	26
4044	4044	27
4045	4045	28
4046	4046	29
4047	4047	30
4048	4048	31
4049	4049	32
4050	4050	33
4051	4051	34
4052	4052	35
4053	4053	36
4054	4054	37
4055	4055	38
4056	4056	39
4057	4057	40
4058	4058	41
4059	4059	42
4060	4060	43 HB 2038 48
4061	4061	incorporation in such project. The contractor shall furnish the number of
4062	4062	such certificates to all suppliers from whom such purchases are made, and
4063	4063	such suppliers shall execute invoices covering the same bearing the
4064	4064	number of such certificate. Upon completion of the project, the contractor
4065	4065	shall furnish to the owner of the business a sworn statement, on a form to
4066	4066	be provided by the director of taxation, that all purchases so made were
4067	4067	entitled to exemption under this subsection. All invoices shall be held by
4068	4068	the contractor for a period of five years and shall be subject to audit by the
4069	4069	director of taxation. Any contractor or any agent, employee or
4070	4070	subcontractor of the contractor, who shall use or otherwise dispose of any
4071	4071	materials, machinery or equipment purchased under such a certificate for
4072	4072	any purpose other than that for which such a certificate is issued without
4073	4073	the payment of the sales or compensating tax otherwise imposed thereon,
4074	4074	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4075	4075	subject to the penalties provided for in K.S.A. 79-3615(h), and
4076	4076	amendments thereto;
4077	4077	(iiii) all sales of tangible personal property or services purchased by a
4078	4078	contractor for the purpose of constructing, maintaining, repairing,
4079	4079	enlarging, furnishing or remodeling facilities for the operation of services
4080	4080	for Wichita children's home for any such purpose that would be exempt
4081	4081	from taxation under the provisions of this section if purchased directly by
4082	4082	Wichita children's home. Nothing in this subsection shall be deemed to
4083	4083	exempt the purchase of any construction machinery, equipment or tools
4084	4084	used in the constructing, maintaining, repairing, enlarging, furnishing or
4085	4085	remodeling such facilities for Wichita children's home. When Wichita
4086	4086	children's home contracts for the purpose of constructing, maintaining,
4087	4087	repairing, enlarging, furnishing or remodeling such facilities, it shall obtain
4088	4088	from the state and furnish to the contractor an exemption certificate for the
4089	4089	project involved, and the contractor may purchase materials for
4090	4090	incorporation in such project. The contractor shall furnish the number of
4091	4091	such certificate to all suppliers from whom such purchases are made, and
4092	4092	such suppliers shall execute invoices covering the same bearing the
4093	4093	number of such certificate. Upon completion of the project, the contractor
4094	4094	shall furnish to Wichita children's home a sworn statement, on a form to be
4095	4095	provided by the director of taxation, that all purchases so made were
4096	4096	entitled to exemption under this subsection. All invoices shall be held by
4097	4097	the contractor for a period of five years and shall be subject to audit by the
4098	4098	director of taxation. If any materials purchased under such a certificate are
4099	4099	found not to have been incorporated in the building or other project or not
4100	4100	to have been returned for credit or the sales or compensating tax otherwise
4101	4101	imposed upon such materials that will not be so incorporated in the
4102	4102	building or other project reported and paid by such contractor to the
4103	4103	director of taxation not later than the 20
4104	4104	th
4105	4105	day of the month following the
4106	4106	1
4107	4107	2
4108	4108	3
4109	4109	4
4110	4110	5
4111	4111	6
4112	4112	7
4113	4113	8
4114	4114	9
4115	4115	10
4116	4116	11
4117	4117	12
4118	4118	13
4119	4119	14
4120	4120	15
4121	4121	16
4122	4122	17
4123	4123	18
4124	4124	19
4125	4125	20
4126	4126	21
4127	4127	22
4128	4128	23
4129	4129	24
4130	4130	25
4131	4131	26
4132	4132	27
4133	4133	28
4134	4134	29
4135	4135	30
4136	4136	31
4137	4137	32
4138	4138	33
4139	4139	34
4140	4140	35
4141	4141	36
4142	4142	37
4143	4143	38
4144	4144	39
4145	4145	40
4146	4146	41
4147	4147	42
4148	4148	43 HB 2038 49
4149	4149	close of the month in which it shall be determined that such materials will
4150	4150	not be used for the purpose for which such certificate was issued, Wichita
4151	4151	children's home shall be liable for the tax on all materials purchased for the
4152	4152	project, and upon payment, it may recover the same from the contractor
4153	4153	together with reasonable attorney fees. Any contractor or any agent,
4154	4154	employee or subcontractor, who shall use or otherwise dispose of any
4155	4155	materials purchased under such a certificate for any purpose other than that
4156	4156	for which such a certificate is issued without the payment of the sales or
4157	4157	compensating tax otherwise imposed upon such materials, shall be guilty
4158	4158	of a misdemeanor and, upon conviction, shall be subject to the penalties
4159	4159	provided for in K.S.A. 79-3615(h), and amendments thereto;
4160	4160	(jjjj) all sales of tangible personal property or services purchased by
4161	4161	or on behalf of the beacon, inc., that is exempt from federal income
4162	4162	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
4163	4163	for the purpose of providing those desiring help with food, shelter, clothing
4164	4164	and other necessities of life during times of special need;
4165	4165	(kkkk) all sales of tangible personal property and services purchased
4166	4166	by or on behalf of reaching out from within, inc., which is exempt from
4167	4167	federal income taxation pursuant to section 501(c)(3) of the federal
4168	4168	internal revenue code, for the purpose of sponsoring self-help programs for
4169	4169	incarcerated persons that will enable such incarcerated persons to become
4170	4170	role models for non-violence while in correctional facilities and productive
4171	4171	family members and citizens upon return to the community;
4172	4172	(llll) all sales of tangible personal property and services purchased by
4173	4173	Gove county healthcare endowment foundation, inc., which is exempt
4174	4174	from federal income taxation pursuant to section 501(c)(3) of the federal
4175	4175	internal revenue code of 1986, and which such property and services are
4176	4176	used for the purpose of constructing and equipping an airport in Quinter,
4177	4177	Kansas, and all sales of tangible personal property or services purchased
4178	4178	by a contractor for the purpose of constructing and equipping an airport in
4179	4179	Quinter, Kansas, for such organization, that would be exempt from
4180	4180	taxation under the provisions of this section if purchased directly by such
4181	4181	organization. Nothing in this subsection shall be deemed to exempt the
4182	4182	purchase of any construction machinery, equipment or tools used in the
4183	4183	constructing or equipping of facilities for such organization. When such
4184	4184	organization shall contract for the purpose of constructing or equipping an
4185	4185	airport in Quinter, Kansas, it shall obtain from the state and furnish to the
4186	4186	contractor an exemption certificate for the project involved, and the
4187	4187	contractor may purchase materials for incorporation in such project. The
4188	4188	contractor shall furnish the number of such certificate to all suppliers from
4189	4189	whom such purchases are made, and such suppliers shall execute invoices
4190	4190	covering the same bearing the number of such certificate. Upon
4191	4191	completion of the project, the contractor shall furnish to such organization
4192	4192	1
4193	4193	2
4194	4194	3
4195	4195	4
4196	4196	5
4197	4197	6
4198	4198	7
4199	4199	8
4200	4200	9
4201	4201	10
4202	4202	11
4203	4203	12
4204	4204	13
4205	4205	14
4206	4206	15
4207	4207	16
4208	4208	17
4209	4209	18
4210	4210	19
4211	4211	20
4212	4212	21
4213	4213	22
4214	4214	23
4215	4215	24
4216	4216	25
4217	4217	26
4218	4218	27
4219	4219	28
4220	4220	29
4221	4221	30
4222	4222	31
4223	4223	32
4224	4224	33
4225	4225	34
4226	4226	35
4227	4227	36
4228	4228	37
4229	4229	38
4230	4230	39
4231	4231	40
4232	4232	41
4233	4233	42
4234	4234	43 HB 2038 50
4235	4235	concerned a sworn statement, on a form to be provided by the director of
4236	4236	taxation, that all purchases so made were entitled to exemption under this
4237	4237	subsection. All invoices shall be held by the contractor for a period of five
4238	4238	years and shall be subject to audit by the director of taxation. If any
4239	4239	materials purchased under such a certificate are found not to have been
4240	4240	incorporated in such facilities or not to have been returned for credit or the
4241	4241	sales or compensating tax otherwise imposed upon such materials that will
4242	4242	not be so incorporated in such facilities reported and paid by such
4243	4243	contractor to the director of taxation no later than the 20
4244	4244	th
4245	4245	day of the month
4246	4246	following the close of the month in which it shall be determined that such
4247	4247	materials will not be used for the purpose for which such certificate was
4248	4248	issued, such organization concerned shall be liable for tax on all materials
4249	4249	purchased for the project, and upon payment thereof it may recover the
4250	4250	same from the contractor together with reasonable attorney fees. Any
4251	4251	contractor or any agent, employee or subcontractor thereof, who purchased
4252	4252	under such a certificate for any purpose other than that for which such a
4253	4253	certificate is issued without the payment of the sales or compensating tax
4254	4254	otherwise imposed upon such materials, shall be guilty of a misdemeanor
4255	4255	and, upon conviction therefor, shall be subject to the penalties provided for
4256	4256	in K.S.A. 79-3615(h), and amendments thereto. The provisions of this
4257	4257	subsection shall expire and have no effect on and after July 1, 2019;
4258	4258	(mmmm) all sales of gold or silver coins; and palladium, platinum,
4259	4259	gold or silver bullion. For the purposes of this subsection, "bullion" means
4260	4260	bars, ingots or commemorative medallions of gold, silver, platinum,
4261	4261	palladium, or a combination thereof, for which the value of the metal
4262	4262	depends on its content and not the form;
4263	4263	(nnnn) all sales of tangible personal property or services purchased
4264	4264	by friends of hospice of Jefferson county, an organization that is exempt
4265	4265	from federal income taxation pursuant to section 501(c)(3) of the federal
4266	4266	internal revenue code of 1986, for the purpose of providing support to the
4267	4267	Jefferson county hospice agency in end-of-life care of Jefferson county
4268	4268	families, friends and neighbors, and all sales of entry or participation fees,
4269	4269	charges or tickets by friends of hospice of Jefferson county for such
4270	4270	organization's fundraising event for such purpose;
4271	4271	(oooo) all sales of tangible personal property or services purchased
4272	4272	for the purpose of and in conjunction with constructing, reconstructing,
4273	4273	enlarging or remodeling a qualified business facility by a qualified firm or
4274	4274	qualified supplier that meets the requirements established in K.S.A. 2024
4275	4275	Supp. 74-50,312 and 74-50,319, and amendments thereto, and that has
4276	4276	been approved for a project exemption certificate by the secretary of
4277	4277	commerce, and the sale and installation of machinery and equipment
4278	4278	purchased by such qualified firm or qualified supplier for installation at
4279	4279	any such qualified business facility. When a person shall contract for the
4280	4280	1
4281	4281	2
4282	4282	3
4283	4283	4
4284	4284	5
4285	4285	6
4286	4286	7
4287	4287	8
4288	4288	9
4289	4289	10
4290	4290	11
4291	4291	12
4292	4292	13
4293	4293	14
4294	4294	15
4295	4295	16
4296	4296	17
4297	4297	18
4298	4298	19
4299	4299	20
4300	4300	21
4301	4301	22
4302	4302	23
4303	4303	24
4304	4304	25
4305	4305	26
4306	4306	27
4307	4307	28
4308	4308	29
4309	4309	30
4310	4310	31
4311	4311	32
4312	4312	33
4313	4313	34
4314	4314	35
4315	4315	36
4316	4316	37
4317	4317	38
4318	4318	39
4319	4319	40
4320	4320	41
4321	4321	42
4322	4322	43 HB 2038 51
4323	4323	construction, reconstruction, enlargement or remodeling of any such
4324	4324	qualified business facility, such person shall obtain from the state and
4325	4325	furnish to the contractor an exemption certificate for the project involved,
4326	4326	and the contractor may purchase materials, machinery and equipment for
4327	4327	incorporation in such project. The contractor shall furnish the number of
4328	4328	such certificates to all suppliers from whom such purchases are made, and
4329	4329	such suppliers shall execute invoices covering the same bearing the
4330	4330	number of such certificate. Upon completion of the project, the contractor
4331	4331	shall furnish to the owner of the qualified firm or qualified supplier a
4332	4332	sworn statement, on a form to be provided by the director of taxation, that
4333	4333	all purchases so made were entitled to exemption under this subsection.
4334	4334	All invoices shall be held by the contractor for a period of five years and
4335	4335	shall be subject to audit by the director of taxation. Any contractor or any
4336	4336	agent, employee or subcontractor thereof who shall use or otherwise
4337	4337	dispose of any materials, machinery or equipment purchased under such a
4338	4338	certificate for any purpose other than that for which such a certificate is
4339	4339	issued without the payment of the sales or compensating tax otherwise
4340	4340	imposed thereon, shall be guilty of a misdemeanor and, upon conviction
4341	4341	therefor, shall be subject to the penalties provided for in K.S.A. 79-
4342	4342	3615(h), and amendments thereto. As used in this subsection, "qualified
4343	4343	business facility," "qualified firm" and "qualified supplier" mean the same
4344	4344	as defined in K.S.A. 2024 Supp. 74-50,311, and amendments thereto;
4345	4345	(pppp) (1) all sales of tangible personal property or services
4346	4346	purchased by a not-for-profit corporation that is designated as an area
4347	4347	agency on aging by the secretary for aging and disabilities services and is
4348	4348	exempt from federal income taxation pursuant to section 501(c)(3) of the
4349	4349	federal internal revenue code for the purpose of coordinating and
4350	4350	providing seniors and those living with disabilities with services that
4351	4351	promote person-centered care, including home-delivered meals,
4352	4352	congregate meal settings, long-term case management, transportation,
4353	4353	information, assistance and other preventative and intervention services to
4354	4354	help service recipients remain in their homes and communities or for the
4355	4355	purpose of constructing, equipping, reconstructing, maintaining, repairing,
4356	4356	enlarging, furnishing or remodeling facilities for such area agency on
4357	4357	aging; and
4358	4358	(2) all sales of tangible personal property or services purchased by a
4359	4359	contractor for the purpose of constructing, equipping, reconstructing,
4360	4360	maintaining, repairing, enlarging, furnishing or remodeling facilities for an
4361	4361	area agency on aging that would be exempt from taxation under the
4362	4362	provisions of this section if purchased directly by such area agency on
4363	4363	aging. Nothing in this paragraph shall be deemed to exempt the purchase
4364	4364	of any construction machinery, equipment or tools used in the
4365	4365	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
4366	4366	1
4367	4367	2
4368	4368	3
4369	4369	4
4370	4370	5
4371	4371	6
4372	4372	7
4373	4373	8
4374	4374	9
4375	4375	10
4376	4376	11
4377	4377	12
4378	4378	13
4379	4379	14
4380	4380	15
4381	4381	16
4382	4382	17
4383	4383	18
4384	4384	19
4385	4385	20
4386	4386	21
4387	4387	22
4388	4388	23
4389	4389	24
4390	4390	25
4391	4391	26
4392	4392	27
4393	4393	28
4394	4394	29
4395	4395	30
4396	4396	31
4397	4397	32
4398	4398	33
4399	4399	34
4400	4400	35
4401	4401	36
4402	4402	37
4403	4403	38
4404	4404	39
4405	4405	40
4406	4406	41
4407	4407	42
4408	4408	43 HB 2038 52
4409	4409	furnishing or remodeling facilities for an area agency on aging. When an
4410	4410	area agency on aging contracts for the purpose of constructing, equipping,
4411	4411	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
4412	4412	facilities, it shall obtain from the state and furnish to the contractor an
4413	4413	exemption certificate for the project involved, and such contractor may
4414	4414	purchase materials for incorporation in such project. The contractor shall
4415	4415	furnish the number of such certificate to all suppliers from whom such
4416	4416	purchases are made, and such suppliers shall execute invoices covering the
4417	4417	same bearing the number of such certificate. Upon completion of the
4418	4418	project, the contractor shall furnish to such area agency on aging a sworn
4419	4419	statement, on a form to be provided by the director of taxation, that all
4420	4420	purchases so made were entitled to exemption under this subsection. All
4421	4421	invoices shall be held by the contractor for a period of five years and shall
4422	4422	be subject to audit by the director of taxation. If any materials purchased
4423	4423	under such a certificate are found not to have been incorporated in the
4424	4424	building or other project or not to have been returned for credit or the sales
4425	4425	or compensating tax otherwise imposed upon such materials that will not
4426	4426	be so incorporated in the building or other project reported and paid by
4427	4427	such contractor to the director of taxation not later than the 20
4428	4428	th
4429	4429	day of the
4430	4430	month following the close of the month in which it shall be determined
4431	4431	that such materials will not be used for the purpose for which such
4432	4432	certificate was issued, the area agency on aging concerned shall be liable
4433	4433	for tax on all materials purchased for the project, and upon payment
4434	4434	thereof, the area agency on aging may recover the same from the
4435	4435	contractor together with reasonable attorney fees. Any contractor or any
4436	4436	agent, employee or subcontractor thereof who shall use or otherwise
4437	4437	dispose of any materials purchased under such a certificate for any purpose
4438	4438	other than that for which such a certificate is issued without the payment
4439	4439	of the sales or compensating tax otherwise imposed upon such materials
4440	4440	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4441	4441	subject to the penalties provided for in K.S.A. 79-3615(h), and
4442	4442	amendments thereto;
4443	4443	(qqqq) all sales of tangible personal property or services purchased
4444	4444	by Kansas suicide prevention HQ, inc., an organization that is exempt
4445	4445	from federal income taxation pursuant to section 501(c)(3) of the federal
4446	4446	internal revenue code of 1986, for the purpose of bringing suicide
4447	4447	prevention training and awareness to communities across the state;
4448	4448	(rrrr) all sales of the services of slaughtering, butchering, custom
4449	4449	cutting, dressing, processing and packaging of an animal for human
4450	4450	consumption when the animal is delivered or furnished by a customer that
4451	4451	owns the animal and such meat or poultry is for use or consumption by
4452	4452	such customer;
4453	4453	(ssss) all sales of tangible personal property or services purchased by
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4495	4495	42
4496	4496	43 HB 2038 53
4497	4497	or on behalf of doorstep inc., an organization that is exempt from federal
4498	4498	income taxation pursuant to section 501(c)(3) of the federal internal
4499	4499	revenue code of 1986, for the purpose of providing short-term emergency
4500	4500	aid to families and individuals in need, including assistance with food,
4501	4501	clothing, rent, prescription medications, transportation and utilities, and
4502	4502	providing information on services to promote long-term self-sufficiency;
4503	4503	(tttt) on and after January 1, 2024, all sales of tangible personal
4504	4504	property or services purchased by exploration place, inc., an organization
4505	4505	that is exempt from federal income taxation pursuant to section 501(c)(3)
4506	4506	of the federal internal revenue code, and which such property and services
4507	4507	are used for the purpose of constructing, remodeling, furnishing or
4508	4508	equipping a riverfront amphitheater, a destination playscape, an education
4509	4509	center and indoor renovations at exploration place in Wichita, Kansas, all
4510	4510	sales of tangible personal property or services purchased by Kansas
4511	4511	children's discovery center inc. in Topeka, Kansas, and which such
4512	4512	property and services are used for the purpose of constructing, remodeling,
4513	4513	furnishing or equipping projects that include indoor-outdoor classrooms,
4514	4514	an expanded multi-media gallery, a workshop and loading dock and safety
4515	4515	upgrades such as a tornado shelter, lactation room, first aid room and
4516	4516	sensory room and all sales of tangible personal property or services
4517	4517	purchased by a contractor for the purpose of constructing, remodeling,
4518	4518	furnishing or equipping such projects, for such organizations, that would
4519	4519	be exempt from taxation under the provisions of this section if purchased
4520	4520	directly by such organizations. Nothing in this subsection shall be deemed
4521	4521	to exempt the purchase of any construction machinery, equipment or tools
4522	4522	used in the constructing, remodeling, furnishing or equipping of facilities
4523	4523	for such organization. When such organization shall contract for the
4524	4524	purpose of constructing, remodeling, furnishing or equipping such
4525	4525	projects, it shall obtain from the state and furnish to the contractor an
4526	4526	exemption certificate for the project involved, and the contractor may
4527	4527	purchase materials for incorporation in such project. The contractor shall
4528	4528	furnish the number of such certificate to all suppliers from whom such
4529	4529	purchases are made, and such suppliers shall execute invoices covering the
4530	4530	same bearing the number of such certificate. Upon completion of the
4531	4531	project, the contractor shall furnish to such organization a sworn statement,
4532	4532	on a form to be provided by the director of taxation, that all purchases so
4533	4533	made were entitled to exemption under this subsection. All invoices shall
4534	4534	be held by the contractor for a period of five years and shall be subject to
4535	4535	audit by the director of taxation. If any materials purchased under such a
4536	4536	certificate are found not to have been incorporated in such facilities or not
4537	4537	to have been returned for credit or the sales or compensating tax otherwise
4538	4538	imposed upon such materials that will not be so incorporated in such
4539	4539	facilities reported and paid by such contractor to the director of taxation no
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4581	4581	42
4582	4582	43 HB 2038 54
4583	4583	later than the 20
4584	4584	th
4585	4585	day of the month following the close of the month in
4586	4586	which it shall be determined that such materials will not be used for the
4587	4587	purpose for which such certificate was issued, such organization shall be
4588	4588	liable for tax on all materials purchased for the project, and upon payment
4589	4589	thereof may recover the same from the contractor together with reasonable
4590	4590	attorney fees. Any contractor or agent, employee or subcontractor thereof,
4591	4591	who purchased under such a certificate for any purpose other than that for
4592	4592	which such a certificate is issued without the payment of the sales or
4593	4593	compensating tax otherwise imposed upon such materials, shall be guilty
4594	4594	of a misdemeanor and, upon conviction therefor, shall be subject to the
4595	4595	penalties provided for in K.S.A. 79-3615(h), and amendments thereto.
4596	4596	Sales tax paid on and after January 1, 2024, but prior to the effective date
4597	4597	of this act, upon the gross receipts received from any sale exempted by the
4598	4598	amendatory provisions of this subsection shall be refunded. Each claim for
4599	4599	a sales tax refund shall be verified and submitted to the director of taxation
4600	4600	upon forms furnished by the director and shall be accompanied by any
4601	4601	additional documentation required by the director. The director shall
4602	4602	review each claim and shall refund that amount of sales tax paid as
4603	4603	determined under the provisions of this subsection. All refunds shall be
4604	4604	paid from the sales tax refund fund upon warrants of the director of
4605	4605	accounts and reports pursuant to vouchers approved by the director or the
4606	4606	director's designee. The provisions of this subsection shall expire and have
4607	4607	no effect on and after December 31, 2030;
4608	4608	(uuuu) (1) (A) all sales of equipment, machinery, software, ancillary
4609	4609	components, appurtenances, accessories or other infrastructure purchased
4610	4610	for use in the provision of communications services; and
4611	4611	(B) all services purchased by a provider in the provision of the
4612	4612	communications service used in the repair, maintenance or installation in
4613	4613	such communications service.
4614	4614	(2) As used in this subsection:
4615	4615	(A) "Communications service" means internet access service,
4616	4616	telecommunications service, video service or any combination thereof.
4617	4617	(B) "Equipment, machinery, software, ancillary components,
4618	4618	appurtenances, accessories or other infrastructure" includes, but is not
4619	4619	limited to:
4620	4620	(i) Wires, cables, fiber, conduits, antennas, poles, switches, routers,
4621	4621	amplifiers, rectifiers, repeaters, receivers, multiplexers, duplexers,
4622	4622	transmitters, circuit cards, insulating and protective materials and cases,
4623	4623	power equipment, backup power equipment, diagnostic equipment, storage
4624	4624	devices, modems, cable modem termination systems and servers;
4625	4625	(ii) other general central office or headend equipment, such as
4626	4626	channel cards, frames and cabinets;
4627	4627	(iii) equipment used in successor technologies, including items used
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4669	4669	42
4670	4670	43 HB 2038 55
4671	4671	to monitor, test, maintain, enable or facilitate qualifying equipment,
4672	4672	machinery, software, ancillary components, appurtenances and
4673	4673	accessories; and
4674	4674	(iv) other infrastructure that is used in whole or in part to provide
4675	4675	communications services, including broadcasting, distributing, sending,
4676	4676	receiving, storing, transmitting, retransmitting, amplifying, switching,
4677	4677	providing connectivity for or routing communications services.
4678	4678	(C) "Internet access service" means the same as internet access as
4679	4679	defined in section 1105 of the internet tax freedom act amendments of
4680	4680	2007, public law 110-108.
4681	4681	(D) "Provider" means a person or entity that sells communications
4682	4682	service, including an affiliate or subsidiary.
4683	4683	(E) "Telecommunications service" means the same as defined in
4684	4684	K.S.A. 79-3602, and amendments thereto.
4685	4685	(F) "Video service" means the same as defined in K.S.A. 12-2022,
4686	4686	and amendments thereto.
4687	4687	(3) The provisions of this subsection shall expire and have no effect
4688	4688	on and after July 1, 2029;
4689	4689	(vvvv) (1) all sales of tangible personal property or services
4690	4690	purchased by a contractor for the purpose of constructing, equipping,
4691	4691	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
4692	4692	a building that is operated by, or is intended to be operated by, the Kansas
4693	4693	fairgrounds foundation, a not-for-profit corporation exempt from federal
4694	4694	income taxation pursuant to section 501(c)(3) of the federal internal
4695	4695	revenue code of 1986, and located on the grounds of the Kansas state fair,
4696	4696	and such tangible personal property would be exempt from taxation under
4697	4697	the provisions of this paragraph if purchased directly by such eligible not-
4698	4698	for-profit corporation. Nothing in this subsection shall be deemed to
4699	4699	exempt the purchase of any construction machinery, equipment or tools
4700	4700	used in the constructing, equipping, reconstructing, maintaining, repairing,
4701	4701	enlarging, furnishing or remodeling a building for such eligible not-for-
4702	4702	profit corporation. When such eligible not-for-profit corporation contracts
4703	4703	for the purpose of constructing, equipping, reconstructing, maintaining,
4704	4704	repairing, enlarging, furnishing or remodeling a building, such corporation
4705	4705	shall obtain from the state and furnish to the contractor an exemption
4706	4706	certificate for the project involved, and such contractor may purchase
4707	4707	materials for incorporation in such project. The contractor shall furnish the
4708	4708	number of such certificate to all suppliers from whom such purchases are
4709	4709	made, and such suppliers shall execute invoices covering such purchases
4710	4710	bearing the number of such certificate. Upon completion of the project, the
4711	4711	contractor shall furnish to such eligible not-for-profit corporation a sworn
4712	4712	statement, on a form to be provided by the director of taxation, that all
4713	4713	purchases so made were entitled to exemption under this subsection. All
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4756	4756	43 HB 2038 56
4757	4757	invoices shall be held by the contractor for a period of five years and shall
4758	4758	be subject to audit by the director of taxation. If any materials purchased
4759	4759	under such a certificate are found not to have been incorporated in the
4760	4760	building or returned for credit, the contractor shall report and pay the sales
4761	4761	or compensating tax to the director of taxation not later than the 20
4762	4762	th
4763	4763	day of
4764	4764	the month following the close of the month in which it is determined that
4765	4765	such materials will not be used for the purpose for which such certificate
4766	4766	was issued. The eligible not-for-profit corporation concerned shall be
4767	4767	liable for tax on all materials purchased for the project, and upon payment
4768	4768	thereof, the eligible not-for-profit corporation may recover the same from
4769	4769	the contractor together with reasonable attorney fees. Any contractor or
4770	4770	any agent, employee or subcontractor thereof who shall use or otherwise
4771	4771	dispose of any materials purchased under such a certificate for any purpose
4772	4772	other than that for which such a certificate is issued without the payment
4773	4773	of the sales or compensating tax otherwise imposed upon such materials
4774	4774	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4775	4775	subject to the penalties provided for in K.S.A. 79-3615(h), and
4776	4776	amendments thereto.
4777	4777	(2) Sales tax paid on and after May 19, 2023, but prior to the effective
4778	4778	date of this act upon the gross receipts received from any sale which would
4779	4779	have been exempted by the provisions of this subsection had such sale
4780	4780	occurred after the effective date of this act shall be refunded. Each claim
4781	4781	for a sales tax refund shall be verified and submitted to the director of
4782	4782	taxation upon forms furnished by the director and shall be accompanied by
4783	4783	any additional documentation required by the director. The director shall
4784	4784	review each claim and shall refund that amount of sales tax paid as
4785	4785	determined under the provisions of this subsection. All refunds shall be
4786	4786	paid from the sales tax refund fund upon warrants of the director of
4787	4787	accounts and reports pursuant to vouchers approved by the director or the
4788	4788	director's designee; and
4789	4789	(wwww) (1) all sales of tangible personal property or services
4790	4790	purchased by a pregnancy resource center or residential maternity facility.
4791	4791	(2) As used in this subsection, "pregnancy resource center" or
4792	4792	"residential maternity facility" means an organization that is:
4793	4793	(A) Exempt from federal income taxation pursuant to section 501(c)
4794	4794	(3) of the federal internal revenue code of 1986;
4795	4795	(B) a nonprofit organization organized under the laws of this state;
4796	4796	and
4797	4797	(C) a pregnancy resource center or residential maternity facility that:
4798	4798	(i) Maintains a dedicated phone number for clients;
4799	4799	(ii) maintains in this state its primary physical office, clinic or
4800	4800	residential home that is open for clients for a minimum of 20 hours per
4801	4801	week, excluding state holidays;
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4844	4844	43 HB 2038 57
4845	4845	(iii) offers services, at no cost to the client, for the express purpose of
4846	4846	providing assistance to women in order to carry their pregnancy to term,
4847	4847	encourage parenting or adoption, prevent abortion and promote healthy
4848	4848	childbirth; and
4849	4849	(iv) utilizes trained healthcare providers, as defined by K.S.A. 2024
4850	4850	Supp. 79-32,316, and amendments thereto, to perform any available
4851	4851	medical procedures; and
4852	4852	(xxxx) (1) all sales of tangible personal property or services
4853	4853	constituting production or postproduction expenditures purchased for the
4854	4854	purpose of a certified project by a production company that meets the
4855	4855	requirements established in section 3, and amendments thereto, and that
4856	4856	has been approved for a project exemption certificate by the secretary of
4857	4857	commerce and the sale or installation of machinery and equipment and the
4858	4858	construction, maintenance, repair or modification of sets, props or scenery
4859	4859	or other facilities, constituting production or postproduction expenditures
4860	4860	by such production company for use in this state for a certified project.
4861	4861	Such sales tax exemptions may be prioritized or limited by the secretary of
4862	4862	commerce as provided by section 3, and amendments thereto.
4863	4863	(2) When a production company contracts for construction,
4864	4864	reconstruction, enlargement or remodeling of any facility for purposes of a
4865	4865	certified project that constitutes a production or postproduction
4866	4866	expenditure, the production company shall obtain from the state and
4867	4867	furnish to the contractor an exemption certificate for the certified project,
4868	4868	and the contractor may purchase materials, machinery and equipment for
4869	4869	incorporation in such project. The contractor shall furnish the number of
4870	4870	such certificates to all suppliers from whom such purchases are made, and
4871	4871	such suppliers shall execute invoices covering such purchases bearing the
4872	4872	number of such certificate. Upon completion of the work, the contractor
4873	4873	shall furnish to the owner of the production company a sworn statement,
4874	4874	on a form to be provided by the director of taxation, that all purchases so
4875	4875	made were entitled to exemption under this subsection and section 3, and
4876	4876	amendments thereto. All invoices shall be held by the contractor for a
4877	4877	period of five years and subject to audit by the director of taxation. If any
4878	4878	materials purchased under such a certificate are found not to have been
4879	4879	incorporated in facilities or returned for credit, the contractor shall report
4880	4880	and pay the sales or compensating tax on such materials to the director of
4881	4881	taxation not later than the 20
4882	4882	th
4883	4883	day of the month following the close of the
4884	4884	month in which a determination is made that such materials will not be
4885	4885	used for the purpose for which such certificate was issued. If the
4886	4886	contractor fails to make such payment for such materials to the director of
4887	4887	taxation, the production company concerned shall be liable for tax on all
4888	4888	such materials purchased for the project, and upon payment thereof, the
4889	4889	production company may recover the amount of the tax paid from the
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4932	4932	43 HB 2038 58
4933	4933	contractor together with reasonable attorney fees. Any contractor or any
4934	4934	agent, employee or subcontractor thereof who uses or otherwise disposes
4935	4935	of any materials, machinery or equipment purchased under such a
4936	4936	certificate for any purpose other than that for which such a certificate is
4937	4937	issued without the payment of the sales or compensating tax otherwise
4938	4938	imposed thereon shall be guilty of an unclassified misdemeanor and, upon
4939	4939	conviction therefor, shall be subject to the penalties provided for in K.S.A.
4940	4940	79-3615(h), and amendments thereto.
4941	4941	(3) As used in this subsection, "certified project," "postproduction
4942	4942	expenditure," "production company" and "production expenditure" mean
4943	4943	the same as defined in section 2, and amendments thereto.
4944	4944	Sec. 8. K.S.A. 2024 Supp. 79-3606 is hereby repealed.
4945	4945	Sec. 9. This act shall take effect and be in force from and after its
4946	4946	publication in the statute book.
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