Enacting the aviation and innovative manufacturing in Kansas act to attract businesses establishing a headquarters or engaged in aircraft assembly, electric or hydrogen-powered motor vehicle production, and other specified industries to Kansas by offering companies meeting certain employment and investment requirements an investment tax credit, retention of a percentage of total payroll tax, reimbursement of eligible employee training and education expenses and a sales tax exemption for construction costs.

Session of 2025
HOUSE BILL No. 2308
By Committee on Commerce, Labor and Economic Development
Requested by Rachel Willis on behalf of the Department of Commerce
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AN ACT concerning economic development; enacting the aviation and
innovative manufacturing in Kansas act; relating to tax and other
incentives for projects in specified industries or for headquarters with
specified job requirements of at least 250 new employees and specified
capital investment requirements; providing for a refundable income,
privilege and premium tax credit for a portion of such capital
investment; retention of certain payroll withholding taxes; sales tax
exemption for project construction and machinery and equipment;
Kansas first award for procurement made from Kansas companies;
establishing the aviation and innovative manufacturing in Kansas act
Kansas first fund; providing for appropriations for such fund;
establishing the aviation and innovative manufacturing in Kansas act
new employee training and education fund; amending K.S.A. 2024
Supp. 79-3606 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) The provisions of sections 1 through 8, and
amendment thereto, shall be known and may be cited as the aviation and
innovative manufacturing in Kansas act.
(b) For purposes of the aviation and innovative manufacturing in
Kansas act:
(1) "Abandons" means, when used in reference to a project, that
construction for the purpose of establishing a qualified business facility
has been discontinued or delayed indefinitely, as determined by the
secretary.
(2) "Act" means the aviation and innovative manufacturing in Kansas
act, sections 1 through 8, and amendments thereto.
(3) "Aircraft" means a device that is used or intended to be used for
flight in the air as defined in 14 C.F.R. § 1.1, as in effect on July 1, 2025.
(4) "Applicant" means a legal entity seeking to certify as a qualified
company for the economic development benefits pursuant to this act.
(5) "Commence investment" means to begin to invest, with action
being directly connected to documentation describing the project
previously submitted to the department.
(6) "Commencement of commercial operations" means the date, as
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HB 2308 2
determined by the secretary, that the qualified business facility is first
available for use by the qualified company or first capable of being used
by the qualified company in the revenue-producing enterprise in which the
qualified company intends to use the qualified business facility.
(7) "Commitment to invest" means one or both of the following:
(A) The qualified company relocates assets that it already owns to
Kansas from an out-of-state location; or
(B) the qualified company enters into a written agreement with a third
party to acquire assets that provides either party with legally enforceable
remedies if the agreement is breached.
(8) "Construction" means construction, reconstruction, enlarging or
remodeling for the purpose of establishing a qualified business facility.
(9) "County median wage" means the median wage paid to
employees located in the county where the qualified company intends to
employ new employees as reported by the department of labor in its
annual Kansas wage survey for the previous year.
(10) "Department" means the department of commerce.
(11) "Electric motor vehicle" means a passenger or freight motor
vehicle primarily powered by an electric motor that draws current from
rechargeable storage batteries, fuel cells, photovoltaic arrays or other
sources of electric current and may include an electric-hybrid vehicle.
(12) "Facility" means any factory, mill, plant, refinery, warehouse,
headquarters, building or complex of buildings located within this state,
including, but not limited to, the land on which such facility is located and
all machinery, equipment and other real and tangible personal property at
or within such facility used in connection with the operation of such
facility. For the purposes of this paragraph, "building" means only
structures within which individuals are customarily employed or that are
customarily used to house machinery, equipment or other property.
(13) "Headquarters" means a qualified business facility that meets the
following conditions:
(A) The main activity at the qualified business facility is providing
direction, management or administrative support for the operation of
multiple company-owned worksites or facilities that are engaged in
qualified activities and in which the applicant has an ownership interest
greater than 50%; and
(B) the qualified business facility would be capable of being
geographically located in any state to carry out its activities, including the
main activity as provided by subparagraph (A).
(14) "Hydrogen-powered vehicle" means a passenger or freight motor
vehicle that uses hydrogen as a significant source of motive power, either
through a fuel cell or internal combustion.
(15) "Metropolitan county" means the county of Douglas, Johnson,
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Sedgwick, Shawnee or Wyandotte.
(16) "New employee" means a qualified business facility employee
who is newly employed in Kansas by the qualified company in the
qualified company's business operating in Kansas during the taxable year
for which benefits are sought. Qualified business facility employees
performing functions directly related to a relocating, expanding or new
business facility, office, department or other operation shall be considered
"new employees."
(17) "On-the-job training" means training situations during which a
product or service that can be sold or used in internal operations is
generated.
(18) "Qualified activities" means engaging in one or more of the
following industries, as determined by the secretary:
(A) Any industry identified by NAICS code:
(i) Subsector 336; or
(ii) industry group 335910;
(B) research and development operations for any qualified activity;
(C) aircraft assembly;
(D) electric or hydrogen-powered vehicle manufacturing;
(E) component or subassembly manufacturing for any qualified
activity;
(F) sustainable aviation fuel production;
(G) hydrogen production for use associated with another qualified
activity; or
(H) battery production for use associated with another qualified
activity.
(19) "Qualified business facility" means a facility located in Kansas
that satisfies the requirements of subparagraphs (A) and (B):
(A) Such facility is for use by the qualified company in the overall
operation of a revenue-producing enterprise. Such facility shall not be
considered a "qualified business facility" in the hands of the qualified
company if the qualified company's only activity with respect to such
facility is to lease it to another person or persons. If the qualified company
employs only a portion of such facility in the operation of a revenue-
producing enterprise and leases another portion of such facility to another
person or persons or does not otherwise use such other portions in the
operation of a revenue-producing enterprise, the portion employed by the
qualified company in the operation of a revenue-producing enterprise shall
be considered a "qualified business facility" if the requirements of
subparagraph (B) are satisfied.
(B) If such facility was acquired or leased by the qualified company
from another person or persons, the facility was not used, either
immediately prior to the transfer of title to the qualified company or to the
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commencement of the term of the lease to the qualified company, by any
other person or persons in the operation of a revenue-producing enterprise
that is the same or substantially the same as the revenue-producing
enterprise continued by the qualified company at the facility unless the
other person or persons in the operation of the revenue-producing
enterprise ceased such operations at the facility and the acquisition or lease
of the facility by the qualified company was made with an intent by the
qualified company to continue such operations or substantially the same
operations or such revenue-producing enterprise was acquired by the
qualified company, and the secretary determines that the acquisition or
lease of the facility by the qualified company is in the best interests of the
economic welfare and development of this state.
(20) "Qualified business facility employee" means an individual
employed in Kansas by the qualified company at a qualified business
facility project site, employed full time and scheduled to work for an
average minimum of 30 hours per week.
(21) "Qualified business facility investment" or "qualified
investment" means the value of the real and tangible personal property,
except inventory or property held for sale to customers in the ordinary
course of the qualified company's business, that constitutes the qualified
business facility or that is used by the qualified company in the operation
of the qualified business facility, including such property used for
administrative or managerial functions, during the taxable years for which
the tax credit allowed by sections 2 and 3, and amendments thereto, is
claimed. "Qualified business facility investment" does not include any
building, land or other real or tangible personal property that is granted,
leased or transferred to the qualified company without cost to the qualified
company. For purposes of calculating the qualified business facility
investment, real or tangible personal property that is granted, leased or
transferred to the qualified company at a cost of less than fair market value
shall be reduced in value, by the difference in cost to the qualified
company and fair market value. The value of such property during such
taxable year shall be:
(A) Such property's original cost if owned by the qualified company;
or
(B) eight times the net annual rental rate if leased by the qualified
company. The net annual rental rate shall be the annual rental rate paid by
the qualified company less any annual rental rate received by the qualified
company from subrentals. The "qualified business facility investment"
shall be determined by dividing by 12 the sum of the total value of such
property on the last business day of each calendar month of the taxable
year. Notwithstanding the provisions of this paragraph, for the purpose of
computing the credit allowed by section 3, and amendments thereto, in the
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case of a "qualified business facility investment" in a qualified business
facility that existed and was operated by the qualified company or a related
taxpayer prior to the investment, the amount of the qualified company's
investment shall be computed as follows: Such investment amount shall be
reduced by the average amount, computed as provided in this paragraph,
of the investment of the qualified company or a related taxpayer in the
facility for the taxable year preceding the taxable year in which the
"qualified business facility investment" was made in the facility.
(22) "Qualified company" means a for-profit business establishment,
subject to state income, sales or property taxes, that is:
(A) Engaged in one or more qualified activities;
(B) establishing a headquarters for a business engaged in one or more
qualified activities;
(C) engaged in any industry or revenue-producing activity if seeking
benefits for a qualified business facility that is the headquarters of the for-
profit business;
(D) a supplier of components, sub-assemblies, chemicals or other
process-related tangible goods that are used in a qualified activity, is
located in Kansas and is owned by:
(i) An individual, any partnership, association, limited liability
corporation or corporation domiciled in Kansas; or
(ii) any business, including any business owned by an individual, any
partnership, association, limited liability corporation or corporation, even
if the business is a wholly owned subsidiary of a foreign corporation, that
operates in the state of Kansas for the purpose of supplying a qualified
company engaged in qualified activities; and
(E) eligible for benefits under this act as determined by the secretary.
(23) "Research and development operation" means an operation that
is conducted solely to advance scientific and technical knowledge in any
qualified activity.
(24) "Revenue-producing enterprise" means an enterprise that creates
revenue subject to tax liability in this state.
(25) "Residency in Kansas" means:
(A) Owning, living, renting or leasing real estate in Kansas with the
intent to make the real estate or other real estate in Kansas an employee's
primary home; and
(B) engaging in a trade, business or profession within Kansas.
(26) "Secretary" means the secretary of commerce.
(27) (A) "Total payroll cost" means the payroll amount defined by the
department of labor as total wages on the quarterly wage report and
unemployment tax return. For a qualified business facility, "total payroll
cost" during the appropriate measurement period may be combined with
any pretax earnings in which an employee has elected to direct to a:
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(i) Flexible spending plan;
(ii) deferred compensation plan; or
(iii) retirement plan that includes earnings that the employee would
otherwise have received in the form of taxable wages had it not been for
the voluntary deferral.
(B) "Total payroll cost" does not include company-paid costs for
health insurance, dental insurance and any other employee benefits that are
not reported to the Kansas department of labor on the employer's quarterly
wage report and unemployment tax return.
(28) (A) "Training and education eligible expense" means the amount
actually paid for training and education of the group of employees, or
portion thereof, at any Kansas community college or technical college and
from which the qualified company expects to derive increased productivity
or quality.
(B) "Training and education eligible expense" includes instructor
salaries, curriculum planning and development, materials and supplies,
textbooks, manuals, minor training equipment, certain training facility
costs and any other expenditure that is eligible under the Kansas industrial
training or the Kansas industrial retraining programs.
(C) "Training and education eligible expense" may include, subject to
maximum limits determined by the secretary:
(i) Wages of employees during eligible training; and
(ii) salaries of employee instructors.
(D) "Training and education eligible expense" does not include:
(i) Compensation paid to an employee trainee who is receiving on-
the-job training;
(ii) compensation paid to an employee during self-training, except for
time in which the employee is involved in activities related to an approved
computerized course of study;
(iii) bonus pay received as compensation related to the company's
financial performance or the employee's job performance, or both;
(iv) overtime pay, unless the employee is being paid at an overtime
rate while participating in eligible training;
(v) operations manuals and reference manuals, except that training-
specific manuals may be allowable;
(vi) training and education costs covered by moneys or grants
obtained from state, federal or other government-sponsored workforce
training programs; and
(vii) training and education costs that were paid to a non-Kansas
college or technical college or any other entity that is not a Kansas college
or technical college.
New Sec. 2. (a) There is hereby established the aviation and
innovative manufacturing in Kansas program to be administered by the
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secretary of commerce. The purpose of the aviation and innovative
manufacturing in Kansas program is to attract businesses engaged in
electric motor vehicle and hydrogen-powered vehicle production
industries, aircraft assembly or other qualified activities to build new
business facilities and operations, research and development operations or
new headquarters in Kansas and to encourage the development of a
Kansas-based supply chain for such enterprises.
(b) A qualified company or qualified companies that jointly meet the
requirements of this act may be eligible for the following incentives as
approved by the secretary:
(1) The investment tax credit pursuant to section 3, and amendments
thereto;
(2) retention of a percentage of total payroll tax pursuant to section 4,
and amendments thereto;
(3) reimbursement of eligible employee training and education
expenses pursuant to sections 5 and 6, and amendments thereto;
(4) a sales tax exemption for construction costs of a qualified
business facility pursuant to K.S.A. 79-3606, and amendments thereto, and
section 7, and amendments thereto; and
(5) the Kansas first benefit pursuant to section 8, and amendments
thereto, for procurement made from Kansas companies.
(c) To be eligible to receive an incentive listed in subsection (b), a
qualified company shall:
(1) Submit an application to the secretary in the form and manner
prescribed by the secretary that describes the project or projects and
includes all information requested by the secretary. Two or more qualified
companies may jointly submit an application to meet the requirements of
the act;
(2) agree to complete the project described in the application within
five years of the date of the commitment to invest;
(3) agree to hire a minimum of 250 new employees within five years
from the date of commencement of commercial operations with starting
wages at least 100% of the county median wage of the county where the
employees are employed;
(4) agree to retain such number of new employees for 10 years from
the date of commencement of commercial operations;
(5) agree to in the case of a qualified company that submits an
application to construct a qualified business facility for an electric or
hydrogen motor vehicle assembly operation project or an aircraft assembly
operation project, agree to make a qualified business facility investment of
at least $250,000,000 to be completed within five years of such date as
specified in the agreement with the secretary made pursuant to this section
and commence commercial operations within five years of either the
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HB 2308 8
commitment to invest or the date as specified in the agreement. This
capital investment requirement shall not apply to projects for other
qualified activities;
(6) if requested by the secretary, prior to making a commitment to
invest in a qualified business facility, submit a certificate of intent to invest
in the qualified business facility to the secretary;
(7) if the application is approved by the secretary, enter into a binding
agreement with the secretary with such terms and conditions as required
by the secretary and including the agreements required by subsection (c).
The agreement shall be entered into before any benefits may be provided
under this act. The secretary shall not enter into an agreement with any
qualified company after December 31, 2027; and
(8) as a condition of receiving any benefit pursuant to this act,
commit to repayment of any benefit or benefits received, connected to or
associated with a term or a condition of the agreement that has been
breached as determined by the secretary and the forfeiture of any such
earned benefits and the suspension or cessation of such future benefits for
as long as the breach is not corrected. Such commitment may additionally
include payment of interest from the date benefits were received at a rate
to be determined by the secretary and included in the agreement. All
repayments of benefits or interest by a qualified company pursuant to this
act shall be submitted to the secretary. The secretary shall remit all moneys
received from such repayments or interest to the state treasurer in
accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury to the credit of the state
general fund. In addition to any specific provisions for repayment of
benefits as provided by this act, such commitment shall include the
following:
(A) (1) If required pursuant to subsection (c)(5), the qualified
company fails to invest a minimum of at least $250,000,000 within five
years of the date specified in the agreement, or if any qualified company
abandons a project before the agreement expires, all benefits earned
pursuant to this act shall be revoked and benefits received shall be
reimbursed by the qualified company to the state of Kansas; and
(2) if the qualified company fails to invest at least 90% of the
committed capital investment within five years of the date specified in the
agreement, and if required pursuant to subsection (c)(5) has made a
minimum investment of at least $250,000,000, the qualified company shall
reimburse to the state of Kansas a percentage of the total benefits earned
pursuant to this act that is equivalent to a percentage that is the difference
between 100% of the total committed capital investment and the
percentage of such total committed capital investment that was actually
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HB 2308 9
invested.
(B) If the qualified company fails to maintain at least 90% of the new
employment required by this section, or any higher new employment
commitment required by the agreement, during the period of 10 years after
commencement of commercial operations, the qualified company shall
repay the benefits received pursuant to section 4 or 7, and amendments
thereto, in an amount that reflects the same percentage of the aggregate of
such benefits received as the shortfall, expressed as a percentage, of the
total new employment retention requirement and the new employees
actually retained.
(d) (1) The secretary shall conduct an annual review of the activities
undertaken by a qualified company to ensure that the qualified company:
(A) Remains in good standing with the state;
(B) remains in compliance with the provisions of this act, any rules
and regulations adopted by the secretary and any agreement entered into
pursuant to this act; and
(C) continues to meet the requirements for benefits.
(2) The secretary of commerce shall certify annually to the secretary
of revenue that the qualified company meets the criteria for designation as
a qualified company and is eligible for such benefits. The secretary of
commerce may obtain any information reasonably necessary to determine
such eligibility. Such information shall be confidential to the same extent
as information provided to the secretary to determine eligibility pursuant
to K.S.A.74-50,131, and amendments thereto.
(3) Confidential financial information, any trade secret or other
information obtained pursuant to this section that in the judgment of the
secretary would place the qualified company at a disadvantage in the
marketplace or would significantly interfere with the purposes of this act if
disclosed shall not be subject to disclosure pursuant to K.S.A. 45-215 et
seq., and amendments thereto, but shall be made available to the division
of legislative post audit upon request. The provisions of this paragraph
shall expire on July 1, 2030, unless the legislature reviews and reenacts
such provisions pursuant to K.S.A. 45-229, and amendments thereto.
(e) (1) The books and records concerning investments made, sales,
employment or employee wages for which the qualified c ompany or third
party has retained any Kansas payroll withholding taxes or any other
financial, employee or other records that pertain to eligibility for benefits
or compliance with the requirements of this act shall be available for
inspection by the secretary or the secretary's duly authorized agents or
employees.
(2) (A) Any inspection pursuant to paragraph (1) shall be conducted
within business hours.
(B) The secretary shall provide written notice to the qualified
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company or third party 10 days prior to any such inspection.
(3) Upon request by the secretary, the secretary of revenue shall audit
a qualified company or a third party, if applicable, for compliance with the
provisions of this act.
(f) The secretary of revenue, in consultation with the secretary of
commerce, shall develop a form that shall be completed annually by any
qualified company that received any tax benefit pursuant to this section
and section 3 or 4, and amendments thereto. Such form shall require, at a
minimum, the information required by K.S.A. 79-32,243(a)(1) through (a)
(6), and amendments thereto, and any other information as shall be
required by the secretary of revenue and the secretary of commerce.
(g) The secretary of commerce and the secretary of revenue may
adopt rules and regulations for the implementation of this act.
New Sec. 3. (a) (1) For taxable years commencing after January 1,
2025, a qualified company that makes a qualified business investment in a
qualified business facility and meets the requirements of section 2, and
amendments thereto, and of this section shall be allowed a credit for such
investment as provided by this section against the tax imposed by the
Kansas income tax act, the premium tax or privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
thereto. The credit shall be earned by the taxpayer each taxable year based
on the amount of the qualified investment made in that taxable year as
provided by paragraph (2). The entire amount of the credit that is earned
each taxable year shall not be claimed by the taxpayer in the taxable year
that such credit is earned but shall be divided into not less than five equal
portions, as determined by the secretary. A portion shall be claimed by the
qualified company in each successive taxable year commencing with the
taxable year after the credit is earned. The amount of a portion that
exceeds the qualified company's tax liability for the taxable year in which
such portion is claimed shall be refunded to the taxpayer.
(2) The amount of the tax credit earned in a taxable year pursuant to
this subsection shall be up to 10%, at the discretion of the secretary, of the
entire amount of the qualified investment that is invested during such
taxable year, except for qualified investments for eligible projects located
outside of a metropolitan county. For eligible projects located outside of a
metropolitan county, the amount of the tax credit earned in a taxable year
shall be 10%. Such percentage shall be set forth in the agreement pursuant
to section 2, and amendments thereto. The total qualified investment shall
be completed within five years as provided by section 2, and amendments
thereto. The total amount of the qualified investment shall be at least
$250,000,000 for a qualified company that submits an application to
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HB 2308 11
construct a qualified business facility for an electric or hydrogen motor
vehicle assembly operation or an aircraft assembly project.
(b) No credit shall be issued by the secretary of revenue unless the
qualified company has been certified by the secretary of commerce as
eligible as provided by section 2, and amendments thereto, for each
taxable year that the credit or portion of a credit is claimed.
(c) In addition to any other repayment provisions pursuant to this act,
if the qualified company invests less than 90% of the qualified investment
required under section 2, and amendments thereto, the qualified company
shall be liable for repayment to the state of the amount of the tax credits
received pursuant to this section as provided by section 2, and
amendments thereto.
(d) As a condition for claiming credits pursuant to this section, a
qualified company shall provide information pursuant to K.S.A. 79-
32,243, and amendments thereto, as part of the tax return in which such
credits are claimed. Such credits shall not be denied solely on the basis of
the contents of the information provided by a qualified company pursuant
to K.S.A. 79-32,243, and amendments thereto.
New Sec. 4. (a) For taxable years commencing after January 1, 2025,
a qualified company that meets the requirements of section 2, and
amendments thereto, and this section may be eligible to retain or be
refunded up to 100% of the qualified company's Kansas payroll
withholding taxes under the Kansas withholding and declaration of
estimated tax act for the qualified company's employees that are paid
wages equal to or greater than the county median wage of the county
where the qualified business facility is or will be located. This benefit shall
be available for a period of up to 10 successive taxable years, as
determined by the secretary.
(b) The agreement with the secretary, as required by section 2, and
amendments thereto, shall set forth the percentage of payroll withholding
taxes to be retained each year, the starting date for this benefit and the
duration of the benefit. The agreement shall in addition establish any
county median wage standard for purposes of determining eligibility for
the withholding tax benefit pursuant to subsection (a). This standard shall
remain the same for the term of the agreement.
(c) The agreement between the secretary of commerce and a qualified
company shall specify that, if a qualified company fails to hire the number
of new employees as required pursuant to section 2, and amendments
thereto, within five years of the date specified in the agreement, a qualified
company shall remit to the secretary an amount that shall be determined by
comparing the shortfall in job creation expressed as a percentage to the
amount of the aggregate Kansas payroll withholding taxes retained by the
qualified company or remitted to the qualified company by a third party.
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This repayment requirement shall be in addition to any other repayment
provisions pursuant to this act.
(d) For each year that the agreement is in effect, the secretary of
commerce shall certify to the secretary of revenue:
(1) That a qualified company is eligible to receive benefits under this
act and the terms of the agreement;
(2) the number of employees;
(3) the amount of gross wages being paid to each such employee; and
(4) the percentage of payroll withholding taxes to be retained by the
qualified company.
(e) Any qualified company that has entered into an agreement with
the secretary of commerce pursuant to this section and section 2, and
amendments thereto, and is eligible to receive benefits pursuant to this
section, shall complete and submit to the department of revenue the
amount of Kansas payroll withholding tax being retained by a qualified
company or refunded to such company in the form and manner prescribed
by the director of taxation.
(f) The secretary of revenue and the secretary of commerce shall
cooperate to develop and coordinate procedures to implement the
provisions of this act.
New Sec. 5. (a) On and after July 1, 2025, a qualified company that
meets the requirements of section 2, and amendments thereto, and this
section may be eligible for reimbursement for up to one year of training
and education eligible expenses for training or education completed by
each new employee, as determined by the secretary and as provided by this
section. The maximum amount of reimbursement paid to a qualified
company shall be $5,000,000 per qualifying project.
(b) The training shall be in Kansas at any Kansas community college
or technical college as agreed by such community or technical college and
the qualified company. The curriculum shall be provided by the qualified
company. The qualified company and one or more Kansas community
colleges or technical colleges selected for the training by the qualified
company and the secretary of commerce may enter into an agreement
specifically regarding such training consistent with the provisions of
section 2, and amendments thereto, and this section.
(c) A qualified company shall be eligible commencing on the date the
qualified company enters into an agreement with the secretary as provided
in section 2, and amendments thereto, or as determined by the secretary.
Only training and education expenses for new employees that will
establish residency in Kansas by the completion of the training or
education program and are employed in Kansas at a qualified business
facility of a qualified company that is located and operating in Kansas
shall be eligible for reimbursement.
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(d) The agreement with the secretary as required by section 2, and
amendments thereto, shall require an annual showing of eligibility,
including evidence showing the number of new hires, amount of eligible
training and education expense and state residency of the new employee
trainee at the completion of the training, for each year that the incentive is
claimed. The secretary shall require proof of Kansas residency for each
employee for which reimbursement of training and education expenses are
claimed. Such proof may include, but not be limited to, lease or rental
agreements or utility bills in the name of the employee and showing a
Kansas street address.
(e) Subject to appropriations therefor, reimbursement in the amount
approved by the secretary and pursuant to the terms of the agreement as
required by section 2, and amendments thereto, and any agreement as
provided by subsection (a) shall be made by the secretary from the
aviation and innovative manufacturing in Kansas act new employee
training and education fund established in section 6, and amendments
thereto, in accordance with appropriation acts upon warrants of the
director of accounts and reports issued pursuant to vouchers approved by
the secretary of commerce or the secretary's designee.
(f) No reimbursement shall be issued unless the qualified company
can demonstrate that the new employee trainee has established Kansas
residency within three months after completing the training and has been
certified by the secretary, as provided in section 2, and amendments
thereto, as meeting all requirements of this act, any rules and regulations
of the secretary and the agreement executed pursuant to section 2, and
amendments thereto. As provided by subsection (d), the secretary shall
require proof of Kansas residency for each employee for which
reimbursement of training and education expenses are claimed.
(g) If a qualified company breaches the terms and conditions of the
agreement pursuant to section 2, and amendments thereto, repayment of
any benefits provided pursuant to this section shall be made to the state as
provided by section 2, and amendments thereto.
New Sec. 6. There is hereby established in the state treasury the
aviation and innovative manufacturing in Kansas act new employee
training and education fund to be administered by the secretary of
commerce. All moneys credited to the aviation and innovative
manufacturing in Kansas act new employee training and education fund
shall be used by the Kansas department of commerce for reimbursement to
qualified companies for training and education eligible expenses pursuant
to the provisions of sections 2 and 5, and amendments thereto. All
expenditures from the aviation and innovative manufacturing in Kansas act
new employee training and education fund shall be made in accordance
with appropriation acts upon warrants of the director of accounts and
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reports issued pursuant to vouchers approved by the secretary of
commerce or the secretary's designee.
New Sec. 7. (a) On and after July 1, 2025, a qualified company that
meets the requirements of section 2, and amendments thereto, and this
section may be eligible for a sales tax exemption under the provisions of
K.S.A. 79-3606(xxxx), and amendments thereto, if approved by the
secretary of commerce.
(b) The sales tax exemption may be made available to a qualified
company on the date that the qualified company commences construction
of the qualified business facility, as determined by the secretary, or an
earlier date if agreed by the secretary and incorporated into the agreement
required by section 2, and amendments thereto.
(c) The secretary of commerce shall provide notice to the secretary of
revenue regarding an approval of a sales tax exemption under this section.
The sales tax exemption shall be valid until construction of the qualified
business facility has been completed as certified by the secretary of
commerce to the secretary of revenue or the date specified for completion
of the qualified business facility in the agreement executed pursuant to
section 2, and amendments thereto, whichever occurs first. No sales tax
exemption shall be issued by the secretary of revenue unless the qualified
company has been certified by the secretary of commerce as meeting all
applicable requirements of section 2, and amendments thereto, this section
and the agreement required by section 2, and amendments thereto, for
failing to meet the requirements of section 2, and amendments thereto, this
section or the agreement required by section 2, and amendments thereto.
(d) A sales tax exemption shall be revoked by the secretary of
revenue upon notification by the secretary of commerce that the qualified
company has been disapproved by the secretary of commerce for failing to
meet the requirements of section 2, and amendments thereto, this section
or the agreement required by section 2, and amendments thereto. In such
event, the qualified company shall remit to the secretary the amount of
sales or compensating use tax exempted as provided by section 2, and
amendments thereto, except as otherwise specified by subsection (e).
(e) If a qualified company breaches the terms and conditions of the
agreement required by section 2, and amendments thereto, for failure to
hire and or retain a minimum of 90% of the number of new employees as
specified in the agreement the qualified company shall be required to remit
to the secretary an amount that shall be determined by comparing the
shortfall in job creation and retention, expressed as a percentage, to the
amount of the sales tax exemption provided to the qualified company. This
repayment requirement or any repayment pursuant to subsection (d) shall
be in addition to any other applicable repayment requirement pursuant to
this act.
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New Sec. 8. (a) Subject to appropriations therefore and upon
approval by the secretary, a qualified company may receive a Kansas first
benefit as provided by this section of up to $1,000,000 for every
$20,000,000 of procurement of goods or services made in a fiscal year
from one or more Kansas companies that are not affiliated in any manner
by ownership or control with the qualified company. The Kansas company
or companies from which procurement is made by the qualified company
shall be registered with the Kansas secretary of state and legally
conducting business within Kansas, have the principal place of business in
Kansas and be in good standing. The secretary shall verify and approve the
amount of procurement and that the qualified company and the Kansas
company or companies meet the requirements of this section prior to any
payment of this benefit.
(b) The Kansas first benefit pursuant to this section may be claimed
by a qualified company once for a fiscal year and shall be limited to three
separate claims per qualified company based on procurement made in the
fiscal year for which each claim is made. Such claims need not be made in
consecutive fiscal years but shall be made within the term of the
agreement with the secretary pursuant to section 3, and amendments
thereto, and during a period when the qualified company is receiving one
or more other benefits pursuant to this act. The claim shall be made after
the end of the fiscal year that the claim is based upon at such time as
determined by the secretary. The maximum aggregate amount awarded by
the secretary for a fiscal year shall be $5,000,000. If more than one
qualified company makes a claim for a fiscal year, the secretary shall make
awards, if approved, to each claimant in an amount proportionate to the
aggregate $5,000,000 award limit as the amount of procurement made by
the claimant is proportionate to the aggregate procurement made by all
claimants for such fiscal year. The amount of an approved claim shall be
paid to the qualified company from the aviation and innovative
manufacturing in Kansas act Kansas first fund, established by subsection
(e).
(c) The qualified company and any Kansas company asserted by the
qualified company as a procurement vendor or service provider shall
submit all documentation requested by the secretary for the purpose of
verifying that the requirements of this section have been met, an award
should be approved and the amount of an award.
(d) If a qualified company breaches the terms and conditions of the
agreement pursuant to section 3, and amendments thereto, or the
provisions of this section, the qualified company shall reimburse the state
of Kansas the total amount of benefits provided to the qualified company
pursuant to this section with interest, as provided by section 3, and
amendments thereto.
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(e) There is hereby established in the state treasury the aviation and
innovative manufacturing in Kansas act Kansas first fund to be
administered by the secretary of commerce. All moneys credited to the
aviation and innovative manufacturing in Kansas act Kansas first fund
shall be used by the department of commerce for awards to qualified
companies for procurement made from Kansas companies pursuant to the
provisions of this section. Expenditures from the aviation and innovative
manufacturing in Kansas act Kansas first fund shall be made in accordance
with appropriation acts upon warrants of the director of accounts and
reports issued pursuant to vouchers approved by the secretary of
commerce or the secretary's designee.
(f) (1) On July 1, 2025, or as soon thereafter as moneys are available,
the director of accounts and reports shall transfer $5,000,000 from the state
general fund to the aviation and innovative manufacturing in Kansas act
Kansas first fund.
(2) Funds remaining in the aviation and innovative manufacturing in
Kansas act Kansas first fund at the end of any fiscal year may be used by
the secretary as provided in this section in any succeeding fiscal year or
years.
New Sec. 9. (a) On or before January 31 of each year, the secretary of
commerce shall transmit to the governor, the senate standing committees
on assessment and taxation and commerce and the house of representatives
standing committees on taxation and commerce, labor and economic
development, or any successor committing, a report based on information
received from each qualified company receiving benefits under this act,
describing, at a minimum, the following:
(1) The names of the qualified companies;
(2) the types of qualified companies utilizing the act;
(3) the location of such companies and the location, description and
economic and industry impact of such companies' business operations in
Kansas;
(4) the cumulative number of new employees hired and the new
employees hired in that calendar year, with respect to each qualified
company;
(5) the number of employees who reside in Kansas and the number of
employees who reside in other states, designated with respect to each other
state and, if available, the number of employees who have relocated to
Kansas from another state;
(6) the wages paid for such new employees;
(7) the annual and cumulative amount of investments made;
(8) the annual amount of each benefit provided under this act;
(9) the estimated net state fiscal impact, including the direct and
indirect new state taxes derived from the new employees hired;
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(10) an estimate of the multiplier effect on the Kansas economy of the
benefits received under this act; and
(11) any material defaults by a qualified company of the terms of any
agreement pursuant to section 2, and amendments thereto.
Sec. 10. K.S.A. 2024 Supp. 79-3606 is hereby amended to read as
follows: 79-3606. The following shall be exempt from the tax imposed by
this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales
or excise tax has been paid, not subject to refund, under the laws of this
state except cigarettes and electronic cigarettes as defined by K.S.A. 79-
3301, and amendments thereto, including consumable material for such
electronic cigarettes, cereal malt beverages and malt products as defined
by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt,
malt syrup and malt extract, that is not subject to taxation under the
provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles
taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed
pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and
laundry services taxed pursuant to K.S.A. 65-34,150, and amendments
thereto, and gross receipts from regulated sports contests taxed pursuant to
the Kansas professional regulated sports act, and amendments thereto;
(b) all sales of tangible personal property or service, including the
renting and leasing of tangible personal property, purchased directly by the
state of Kansas, a political subdivision thereof, other than a school or
educational institution, or purchased by a public or private nonprofit
hospital, public hospital authority, nonprofit blood, tissue or organ bank or
nonprofit integrated community care organization and used exclusively for
state, political subdivision, hospital, public hospital authority, nonprofit
blood, tissue or organ bank or nonprofit integrated community care
organization purposes, except when: (1) Such state, hospital or public
hospital authority is engaged or proposes to engage in any business
specifically taxable under the provisions of this act and such items of
tangible personal property or service are used or proposed to be used in
such business; or (2) such political subdivision is engaged or proposes to
engage in the business of furnishing gas, electricity or heat to others and
such items of personal property or service are used or proposed to be used
in such business;
(c) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly by a
public or private elementary or secondary school or public or private
nonprofit educational institution and used primarily by such school or
institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of
buildings to be used for such purposes. The exemption herein provided
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HB 2308 18
shall not apply to erection, construction, repair, enlargement or equipment
of buildings used primarily for human habitation, except that such
exemption shall apply to the erection, construction, repair, enlargement or
equipment of buildings used for human habitation by the cerebral palsy
research foundation of Kansas located in Wichita, Kansas, multi
community diversified services, incorporated, located in McPherson,
Kansas, the Kansas state school for the blind and the Kansas state school
for the deaf;
(d) all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for
any public or private nonprofit hospital or public hospital authority, public
or private elementary or secondary school, a public or private nonprofit
educational institution, state correctional institution including a privately
constructed correctional institution contracted for state use and ownership,
that would be exempt from taxation under the provisions of this act if
purchased directly by such hospital or public hospital authority, school,
educational institution or a state correctional institution; and all sales of
tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any political subdivision
of the state or district described in subsection (s), the total cost of which is
paid from funds of such political subdivision or district and that would be
exempt from taxation under the provisions of this act if purchased directly
by such political subdivision or district. Nothing in this subsection or in
the provisions of K.S.A. 12-3418, and amendments thereto, shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any political
subdivision of the state or any such district. As used in this subsection,
K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a
political subdivision" shall mean general tax revenues, the proceeds of any
bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
purpose of constructing, equipping, reconstructing, repairing, enlarging,
furnishing or remodeling facilities that are to be leased to the donor. When
any political subdivision of the state, district described in subsection (s),
public or private nonprofit hospital or public hospital authority, public or
private elementary or secondary school, public or private nonprofit
educational institution, state correctional institution including a privately
constructed correctional institution contracted for state use and ownership
shall contract for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities, it
shall obtain from the state and furnish to the contractor an exemption
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HB 2308 19
certificate for the project involved, and the contractor may purchase
materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing
the number of such certificate. Upon completion of the project the
contractor shall furnish to the political subdivision, district described in
subsection (s), hospital or public hospital authority, school, educational
institution or department of corrections concerned a sworn statement, on a
form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alternative to the
foregoing procedure, any such contracting entity may apply to the
secretary of revenue for agent status for the sole purpose of issuing and
furnishing project exemption certificates to contractors pursuant to rules
and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices
shall be held by the contractor for a period of five years and shall be
subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the
building or other project or not to have been returned for credit or the sales
or compensating tax otherwise imposed upon such materials that will not
be so incorporated in the building or other project reported and paid by
such contractor to the director of taxation not later than the 20 th day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, the political subdivision, district described in
subsection (s), hospital or public hospital authority, school, educational
institution or the contractor contracting with the department of corrections
for a correctional institution concerned shall be liable for tax on all
materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney
fees. Any contractor or any agent, employee or subcontractor thereof, who
shall use or otherwise dispose of any materials purchased under such a
certificate for any purpose other than that for which such a certificate is
issued without the payment of the sales or compensating tax otherwise
imposed upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(e) all sales of tangible personal property or services purchased by a
contractor for the erection, repair or enlargement of buildings or other
projects for the government of the United States, its agencies or
instrumentalities, that would be exempt from taxation if purchased directly
by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or
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HB 2308 20
instrumentalities shall contract for the erection, repair, or enlargement of
any building or other project, it shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificates to all suppliers
from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to the government of
the United States, its agencies or instrumentalities concerned a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. As an
alternative to the foregoing procedure, any such contracting entity may
apply to the secretary of revenue for agent status for the sole purpose of
issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing
conditions and standards for the granting and maintaining of such status.
All invoices shall be held by the contractor for a period of five years and
shall be subject to audit by the director of taxation. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(f) tangible personal property purchased by a railroad or public utility
for consumption or movement directly and immediately in interstate
commerce;
(g) sales of aircraft including remanufactured and modified aircraft
sold to persons using directly or through an authorized agent such aircraft
as certified or licensed carriers of persons or property in interstate or
foreign commerce under authority of the laws of the United States or any
foreign government or sold to any foreign government or agency or
instrumentality of such foreign government and all sales of aircraft for use
outside of the United States and sales of aircraft repair, modification and
replacement parts and sales of services employed in the remanufacture,
modification and repair of aircraft;
(h) all rentals of nonsectarian textbooks by public or private
elementary or secondary schools;
(i) the lease or rental of all films, records, tapes, or any type of sound
or picture transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of
such meals to employees of any restaurant, eating house, dining car, hotel,
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drugstore or other place where meals or drinks are regularly sold to the
public if such employees' duties are related to the furnishing or sale of
such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are
defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and
delivered in this state to a bona fide resident of another state, which motor
vehicle, semitrailer, pole trailer or aircraft is not to be registered or based
in this state and which vehicle, semitrailer, pole trailer or aircraft will not
remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property,
services, substances or things, except isolated or occasional sale of motor
vehicles specifically taxed under the provisions of K.S.A. 79-3603(o), and
amendments thereto;
(m) all sales of tangible personal property that become an ingredient
or component part of tangible personal property or services produced,
manufactured or compounded for ultimate sale at retail within or without
the state of Kansas; and any such producer, manufacturer or compounder
may obtain from the director of taxation and furnish to the supplier an
exemption certificate number for tangible personal property for use as an
ingredient or component part of the property or services produced,
manufactured or compounded;
(n) all sales of tangible personal property that is consumed in the
production, manufacture, processing, mining, drilling, refining or
compounding of tangible personal property, the treating of by-products or
wastes derived from any such production process, the providing of
services or the irrigation of crops for ultimate sale at retail within or
without the state of Kansas; and any purchaser of such property may
obtain from the director of taxation and furnish to the supplier an
exemption certificate number for tangible personal property for
consumption in such production, manufacture, processing, mining,
drilling, refining, compounding, treating, irrigation and in providing such
services;
(o) all sales of animals, fowl and aquatic plants and animals, the
primary purpose of which is use in agriculture or aquaculture, as defined in
K.S.A. 47-1901, and amendments thereto, the production of food for
human consumption, the production of animal, dairy, poultry or aquatic
plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;
(p) all sales of drugs dispensed pursuant to a prescription order by a
licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-
1626, and amendments thereto. As used in this subsection, "drug" means a
compound, substance or preparation and any component of a compound,
substance or preparation, other than food and food ingredients, dietary
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supplements or alcoholic beverages, recognized in the official United
States pharmacopeia, official homeopathic pharmacopoeia of the United
States or official national formulary, and supplement to any of them,
intended for use in the diagnosis, cure, mitigation, treatment or prevention
of disease or intended to affect the structure or any function of the body,
except that for taxable years commencing after December 31, 2013, this
subsection shall not apply to any sales of drugs used in the performance or
induction of an abortion, as defined in K.S.A. 65-6701, and amendments
thereto;
(q) all sales of insulin dispensed by a person licensed by the state
board of pharmacy to a person for treatment of diabetes at the direction of
a person licensed to practice medicine by the state board of healing arts;
(r) all sales of oxygen delivery equipment, kidney dialysis equipment,
enteral feeding systems, prosthetic devices and mobility enhancing
equipment prescribed in writing by a person licensed to practice the
healing arts, dentistry or optometry, and in addition to such sales, all sales
of hearing aids, as defined by K.S.A. 74-5807(c), and amendments thereto,
and repair and replacement parts therefor, including batteries, by a person
licensed in the practice of dispensing and fitting hearing aids pursuant to
the provisions of K.S.A. 74-5808, and amendments thereto. For the
purposes of this subsection: (1) "Mobility enhancing equipment" means
equipment including repair and replacement parts to same, but does not
include durable medical equipment, which is primarily and customarily
used to provide or increase the ability to move from one place to another
and which is appropriate for use either in a home or a motor vehicle; is not
generally used by persons with normal mobility; and does not include any
motor vehicle or equipment on a motor vehicle normally provided by a
motor vehicle manufacturer; and (2) "prosthetic device" means a
replacement, corrective or supportive device including repair and
replacement parts for same worn on or in the body to artificially replace a
missing portion of the body, prevent or correct physical deformity or
malfunction or support a weak or deformed portion of the body;
(s) except as provided in K.S.A. 82a-2101, and amendments thereto,
all sales of tangible personal property or services purchased directly or
indirectly by a groundwater management district organized or operating
under the authority of K.S.A. 82a-1020 et seq ., and amendments thereto,
by a rural water district organized or operating under the authority of
K.S.A. 82a-612, and amendments thereto, or by a water supply district
organized or operating under the authority of K.S.A. 19-3501 et seq ., 19-
3522 et seq. or 19-3545, and amendments thereto, which property or
services are used in the construction activities, operation or maintenance of
the district;
(t) all sales of farm machinery and equipment or aquaculture
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machinery and equipment, repair and replacement parts therefor and
services performed in the repair and maintenance of such machinery and
equipment. For the purposes of this subsection the term "farm machinery
and equipment or aquaculture machinery and equipment" shall include a
work-site utility vehicle, as defined in K.S.A. 8-126, and amendments
thereto, and is equipped with a bed or cargo box for hauling materials, and
shall also include machinery and equipment used in the operation of
Christmas tree farming but shall not include any passenger vehicle, truck,
truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as
such terms are defined by K.S.A. 8-126, and amendments thereto. "Farm
machinery and equipment" includes precision farming equipment that is
portable or is installed or purchased to be installed on farm machinery and
equipment. "Precision farming equipment" includes the following items
used only in computer-assisted farming, ranching or aquaculture
production operations: Soil testing sensors, yield monitors, computers,
monitors, software, global positioning and mapping systems, guiding
systems, modems, data communications equipment and any necessary
mounting hardware, wiring and antennas. Each purchaser of farm
machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales
ticket to be retained by the seller that the farm machinery and equipment
or aquaculture machinery and equipment purchased will be used only in
farming, ranching or aquaculture production. Farming or ranching shall
include the operation of a feedlot and farm and ranch work for hire and the
operation of a nursery;
(u) all leases or rentals of tangible personal property used as a
dwelling if such tangible personal property is leased or rented for a period
of more than 28 consecutive days;
(v) all sales of tangible personal property to any contractor for use in
preparing meals for delivery to homebound elderly persons over 60 years
of age and to homebound disabled persons or to be served at a group-
sitting at a location outside of the home to otherwise homebound elderly
persons over 60 years of age and to otherwise homebound disabled
persons, as all or part of any food service project funded in whole or in
part by government or as part of a private nonprofit food service project
available to all such elderly or disabled persons residing within an area of
service designated by the private nonprofit organization, and all sales of
tangible personal property for use in preparing meals for consumption by
indigent or homeless individuals whether or not such meals are consumed
at a place designated for such purpose, and all sales of food products by or
on behalf of any such contractor or organization for any such purpose;
(w) all sales of natural gas, electricity, heat and water delivered
through mains, lines or pipes: (1) To residential premises for
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noncommercial use by the occupant of such premises; (2) for agricultural
use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property
taxation pursuant to K.S.A. 79-201b, Second through Sixth. As used in this
paragraph, "severing" means the same as defined in K.S.A. 79-4216(k),
and amendments thereto. For all sales of natural gas, electricity and heat
delivered through mains, lines or pipes pursuant to the provisions of
subsection (w)(1) and (w)(2), the provisions of this subsection shall expire
on December 31, 2005;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources
for the production of heat or lighting for noncommercial use of an
occupant of residential premises occurring prior to January 1, 2006;
(y) all sales of materials and services used in the repairing, servicing,
altering, maintaining, manufacturing, remanufacturing, or modification of
railroad rolling stock for use in interstate or foreign commerce under
authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased
directly by a port authority or by a contractor therefor as provided by the
provisions of K.S.A. 12-3418, and amendments thereto;
(aa) all sales of materials and services applied to equipment that is
transported into the state from without the state for repair, service,
alteration, maintenance, remanufacture or modification and that is
subsequently transported outside the state for use in the transmission of
liquids or natural gas by means of pipeline in interstate or foreign
commerce under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used
in this subsection: (1) "Mobile homes" and "manufactured homes" mean
the same as defined in K.S.A. 58-4202, and amendments thereto; and (2)
"sales of used mobile homes or manufactured homes" means sales other
than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased prior
to January 1, 2012, except as otherwise provided, for the purpose of and in
conjunction with constructing, reconstructing, enlarging or remodeling a
business or retail business that meets the requirements established in
K.S.A. 74-50,115, and amendments thereto, and the sale and installation of
machinery and equipment purchased for installation at any such business
or retail business, and all sales of tangible personal property or services
purchased on or after January 1, 2012, for the purpose of and in
conjunction with constructing, reconstructing, enlarging or remodeling a
business that meets the requirements established in K.S.A. 74-50,115(e),
and amendments thereto, and the sale and installation of machinery and
equipment purchased for installation at any such business. When a person
shall contract for the construction, reconstruction, enlargement or
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HB 2308 25
remodeling of any such business or retail business, such person shall
obtain from the state and furnish to the contractor an exemption certificate
for the project involved, and the contractor may purchase materials,
machinery and equipment for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom
such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to the owner of the
business or retail business a sworn statement, on a form to be provided by
the director of taxation, that all purchases so made were entitled to
exemption under this subsection. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the
director of taxation. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials,
machinery or equipment purchased under such a certificate for any
purpose other than that for which such a certificate is issued without the
payment of the sales or compensating tax otherwise imposed thereon, shall
be guilty of a misdemeanor and, upon conviction therefor, shall be subject
to the penalties provided for in K.S.A. 79-3615(h), and amendments
thereto. As used in this subsection, "business" and "retail business" mean
the same as defined in K.S.A. 74-50,114, and amendments thereto. Project
exemption certificates that have been previously issued under this
subsection by the department of revenue pursuant to K.S.A. 74-50,115,
and amendments thereto, but not including K.S.A. 74-50,115(e), and
amendments thereto, prior to January 1, 2012, and have not expired will be
effective for the term of the project or two years from the effective date of
the certificate, whichever occurs earlier. Project exemption certificates that
are submitted to the department of revenue prior to January 1, 2012, and
are found to qualify will be issued a project exemption certificate that will
be effective for a two-year period or for the term of the project, whichever
occurs earlier;
(dd) all sales of tangible personal property purchased with food
stamps issued by the United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery
operated by the state of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or
manufactured homes to the extent of 40% of the gross receipts, determined
without regard to any trade-in allowance, received from such sale. As used
in this subsection, "mobile homes" and "manufactured homes" mean the
same as defined in K.S.A. 58-4202, and amendments thereto;
(gg) all sales of tangible personal property purchased in accordance
with vouchers issued pursuant to the federal special supplemental food
program for women, infants and children;
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(hh) all sales of medical supplies and equipment, including durable
medical equipment, purchased directly by a nonprofit skilled nursing home
or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to
residents thereof. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes. As used in this
subsection, "durable medical equipment" means equipment including
repair and replacement parts for such equipment, that can withstand
repeated use, is primarily and customarily used to serve a medical purpose,
generally is not useful to a person in the absence of illness or injury and is
not worn in or on the body, but does not include mobility enhancing
equipment as defined in subsection (r), oxygen delivery equipment, kidney
dialysis equipment or enteral feeding systems;
(ii) all sales of tangible personal property purchased directly by a
nonprofit organization for nonsectarian comprehensive multidiscipline
youth development programs and activities provided or sponsored by such
organization, and all sales of tangible personal property by or on behalf of
any such organization. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly on
behalf of a community-based facility for people with intellectual disability
or mental health center organized pursuant to K.S.A. 19-4001 et seq., and
amendments thereto, and licensed in accordance with the provisions of
K.S.A. 39-2001 et seq., and amendments thereto, and all sales of tangible
personal property or services purchased by contractors during the time
period from July, 2003, through June, 2006, for the purpose of
constructing, equipping, maintaining or furnishing a new facility for a
community-based facility for people with intellectual disability or mental
health center located in Riverton, Cherokee County, Kansas, that would
have been eligible for sales tax exemption pursuant to this subsection if
purchased directly by such facility or center. This exemption shall not
apply to tangible personal property customarily used for human habitation
purposes;
(kk) (1) (A) all sales of machinery and equipment that are used in this
state as an integral or essential part of an integrated production operation
by a manufacturing or processing plant or facility;
(B) all sales of installation, repair and maintenance services
performed on such machinery and equipment; and
(C) all sales of repair and replacement parts and accessories
purchased for such machinery and equipment.
(2) For purposes of this subsection:
(A) "Integrated production operation" means an integrated series of
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operations engaged in at a manufacturing or processing plant or facility to
process, transform or convert tangible personal property by physical,
chemical or other means into a different form, composition or character
from that in which it originally existed. Integrated production operations
shall include: (i) Production line operations, including packaging
operations; (ii) preproduction operations to handle, store and treat raw
materials; (iii) post production handling, storage, warehousing and
distribution operations; and (iv) waste, pollution and environmental
control operations, if any;
(B) "production line" means the assemblage of machinery and
equipment at a manufacturing or processing plant or facility where the
actual transformation or processing of tangible personal property occurs;
(C) "manufacturing or processing plant or facility" means a single,
fixed location owned or controlled by a manufacturing or processing
business that consists of one or more structures or buildings in a
contiguous area where integrated production operations are conducted to
manufacture or process tangible personal property to be ultimately sold at
retail. Such term shall not include any facility primarily operated for the
purpose of conveying or assisting in the conveyance of natural gas,
electricity, oil or water. A business may operate one or more manufacturing
or processing plants or facilities at different locations to manufacture or
process a single product of tangible personal property to be ultimately sold
at retail;
(D) "manufacturing or processing business" means a business that
utilizes an integrated production operation to manufacture, process,
fabricate, finish or assemble items for wholesale and retail distribution as
part of what is commonly regarded by the general public as an industrial
manufacturing or processing operation or an agricultural commodity
processing operation. (i) Industrial manufacturing or processing operations
include, by way of illustration but not of limitation, the fabrication of
automobiles, airplanes, machinery or transportation equipment, the
fabrication of metal, plastic, wood or paper products, electricity power
generation, water treatment, petroleum refining, chemical production,
wholesale bottling, newspaper printing, ready mixed concrete production,
and the remanufacturing of used parts for wholesale or retail sale. Such
processing operations shall include operations at an oil well, gas well,
mine or other excavation site where the oil, gas, minerals, coal, clay, stone,
sand or gravel that has been extracted from the earth is cleaned, separated,
crushed, ground, milled, screened, washed or otherwise treated or prepared
before its transmission to a refinery or before any other wholesale or retail
distribution. (ii) Agricultural commodity processing operations include, by
way of illustration but not of limitation, meat packing, poultry slaughtering
and dressing, processing and packaging farm and dairy products in sealed
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HB 2308 28
containers for wholesale and retail distribution, feed grinding, grain
milling, frozen food processing, and grain handling, cleaning, blending,
fumigation, drying and aeration operations engaged in by grain elevators
or other grain storage facilities. (iii) Manufacturing or processing
businesses do not include, by way of illustration but not of limitation,
nonindustrial businesses whose operations are primarily retail and that
produce or process tangible personal property as an incidental part of
conducting the retail business, such as retailers who bake, cook or prepare
food products in the regular course of their retail trade, grocery stores,
meat lockers and meat markets that butcher or dress livestock or poultry in
the regular course of their retail trade, contractors who alter, service, repair
or improve real property, and retail businesses that clean, service or
refurbish and repair tangible personal property for its owner;
(E) "repair and replacement parts and accessories" means all parts
and accessories for exempt machinery and equipment, including, but not
limited to, dies, jigs, molds, patterns and safety devices that are attached to
exempt machinery or that are otherwise used in production, and parts and
accessories that require periodic replacement such as belts, drill bits,
grinding wheels, grinding balls, cutting bars, saws, refractory brick and
other refractory items for exempt kiln equipment used in production
operations;
(F) "primary" or "primarily" mean more than 50% of the time.
(3) For purposes of this subsection, machinery and equipment shall
be deemed to be used as an integral or essential part of an integrated
production operation when used to:
(A) Receive, transport, convey, handle, treat or store raw materials in
preparation of its placement on the production line;
(B) transport, convey, handle or store the property undergoing
manufacturing or processing at any point from the beginning of the
production line through any warehousing or distribution operation of the
final product that occurs at the plant or facility;
(C) act upon, effect, promote or otherwise facilitate a physical change
to the property undergoing manufacturing or processing;
(D) guide, control or direct the movement of property undergoing
manufacturing or processing;
(E) test or measure raw materials, the property undergoing
manufacturing or processing or the finished product, as a necessary part of
the manufacturer's integrated production operations;
(F) plan, manage, control or record the receipt and flow of inventories
of raw materials, consumables and component parts, the flow of the
property undergoing manufacturing or processing and the management of
inventories of the finished product;
(G) produce energy for, lubricate, control the operating of or
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HB 2308 29
otherwise enable the functioning of other production machinery and
equipment and the continuation of production operations;
(H) package the property being manufactured or processed in a
container or wrapping in which such property is normally sold or
transported;
(I) transmit or transport electricity, coke, gas, water, steam or similar
substances used in production operations from the point of generation, if
produced by the manufacturer or processor at the plant site, to that
manufacturer's production operation; or, if purchased or delivered from
off-site, from the point where the substance enters the site of the plant or
facility to that manufacturer's production operations;
(J) cool, heat, filter, refine or otherwise treat water, steam, acid, oil,
solvents or other substances that are used in production operations;
(K) provide and control an environment required to maintain certain
levels of air quality, humidity or temperature in special and limited areas
of the plant or facility, where such regulation of temperature or humidity is
part of and essential to the production process;
(L) treat, transport or store waste or other byproducts of production
operations at the plant or facility; or
(M) control pollution at the plant or facility where the pollution is
produced by the manufacturing or processing operation.
(4) The following machinery, equipment and materials shall be
deemed to be exempt even though it may not otherwise qualify as
machinery and equipment used as an integral or essential part of an
integrated production operation: (A) Computers and related peripheral
equipment that are utilized by a manufacturing or processing business for
engineering of the finished product or for research and development or
product design; (B) machinery and equipment that is utilized by a
manufacturing or processing business to manufacture or rebuild tangible
personal property that is used in manufacturing or processing operations,
including tools, dies, molds, forms and other parts of qualifying machinery
and equipment; (C) portable plants for aggregate concrete, bulk cement
and asphalt including cement mixing drums to be attached to a motor
vehicle; (D) industrial fixtures, devices, support facilities and special
foundations necessary for manufacturing and production operations, and
materials and other tangible personal property sold for the purpose of
fabricating such fixtures, devices, facilities and foundations. An exemption
certificate for such purchases shall be signed by the manufacturer or
processor. If the fabricator purchases such material, the fabricator shall
also sign the exemption certificate; (E) a manufacturing or processing
business' laboratory equipment that is not located at the plant or facility,
but that would otherwise qualify for exemption under subsection (3)(E);
(F) all machinery and equipment used in surface mining activities as
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described in K.S.A. 49-601 et seq., and amendments thereto, beginning
from the time a reclamation plan is filed to the acceptance of the
completed final site reclamation.
(5) "Machinery and equipment used as an integral or essential part of
an integrated production operation" shall not include:
(A) Machinery and equipment used for nonproduction purposes,
including, but not limited to, machinery and equipment used for plant
security, fire prevention, first aid, accounting, administration, record
keeping, advertising, marketing, sales or other related activities, plant
cleaning, plant communications and employee work scheduling;
(B) machinery, equipment and tools used primarily in maintaining
and repairing any type of machinery and equipment or the building and
plant;
(C) transportation, transmission and distribution equipment not
primarily used in a production, warehousing or material handling
operation at the plant or facility, including the means of conveyance of
natural gas, electricity, oil or water, and equipment related thereto, located
outside the plant or facility;
(D) office machines and equipment including computers and related
peripheral equipment not used directly and primarily to control or measure
the manufacturing process;
(E) furniture and other furnishings;
(F) buildings, other than exempt machinery and equipment that is
permanently affixed to or becomes a physical part of the building, and any
other part of real estate that is not otherwise exempt;
(G) building fixtures that are not integral to the manufacturing
operation, such as utility systems for heating, ventilation, air conditioning,
communications, plumbing or electrical;
(H) machinery and equipment used for general plant heating, cooling
and lighting;
(I) motor vehicles that are registered for operation on public
highways; or
(J) employee apparel, except safety and protective apparel that is
purchased by an employer and furnished gratuitously to employees who
are involved in production or research activities.
(6) Paragraphs (3) and (5) shall not be construed as exclusive listings
of the machinery and equipment that qualify or do not qualify as an
integral or essential part of an integrated production operation. When
machinery or equipment is used as an integral or essential part of
production operations part of the time and for nonproduction purposes at
other times, the primary use of the machinery or equipment shall
determine whether or not such machinery or equipment qualifies for
exemption.
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(7) The secretary of revenue shall adopt rules and regulations
necessary to administer the provisions of this subsection;
(ll) all sales of educational materials purchased for distribution to the
public at no charge by a nonprofit corporation organized for the purpose of
encouraging, fostering and conducting programs for the improvement of
public health, except that for taxable years commencing after December
31, 2013, this subsection shall not apply to any sales of such materials
purchased by a nonprofit corporation which performs any abortion, as
defined in K.S.A. 65-6701, and amendments thereto;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides,
herbicides, germicides, pesticides and fungicides; and services, purchased
and used for the purpose of producing plants in order to prevent soil
erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services
rendered by an advertising agency or licensed broadcast station or any
member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a community
action group or agency for the exclusive purpose of repairing or
weatherizing housing occupied by low-income individuals;
(pp) all sales of drill bits and explosives actually utilized in the
exploration and production of oil or gas;
(qq) all sales of tangible personal property and services purchased by
a nonprofit museum or historical society or any combination thereof,
including a nonprofit organization that is organized for the purpose of
stimulating public interest in the exploration of space by providing
educational information, exhibits and experiences, that is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986;
(rr) all sales of tangible personal property that will admit the
purchaser thereof to any annual event sponsored by a nonprofit
organization that is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, except that
for taxable years commencing after December 31, 2013, this subsection
shall not apply to any sales of such tangible personal property purchased
by a nonprofit organization which performs any abortion, as defined in
K.S.A. 65-6701, and amendments thereto;
(ss) all sales of tangible personal property and services purchased by
a public broadcasting station licensed by the federal communications
commission as a noncommercial educational television or radio station;
(tt) all sales of tangible personal property and services purchased by
or on behalf of a not-for-profit corporation that is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal
revenue code of 1986, for the sole purpose of constructing a Kansas
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Korean War memorial;
(uu) all sales of tangible personal property and services purchased by
or on behalf of any rural volunteer fire-fighting organization for use
exclusively in the performance of its duties and functions;
(vv) all sales of tangible personal property purchased by any of the
following organizations that are exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
for the following purposes, and all sales of any such property by or on
behalf of any such organization for any such purpose:
(1) The American heart association, Kansas affiliate, inc. for the
purposes of providing education, training, certification in emergency
cardiac care, research and other related services to reduce disability and
death from cardiovascular diseases and stroke;
(2) the Kansas alliance for the mentally ill, inc. for the purpose of
advocacy for persons with mental illness and to education, research and
support for their families;
(3) the Kansas mental illness awareness council for the purposes of
advocacy for persons who are mentally ill and for education, research and
support for them and their families;
(4) the American diabetes association Kansas affiliate, inc. for the
purpose of eliminating diabetes through medical research, public education
focusing on disease prevention and education, patient education including
information on coping with diabetes, and professional education and
training;
(5) the American lung association of Kansas, inc. for the purpose of
eliminating all lung diseases through medical research, public education
including information on coping with lung diseases, professional education
and training related to lung disease and other related services to reduce the
incidence of disability and death due to lung disease;
(6) the Kansas chapters of the Alzheimer's disease and related
disorders association, inc. for the purpose of providing assistance and
support to persons in Kansas with Alzheimer's disease, and their families
and caregivers;
(7) the Kansas chapters of the Parkinson's disease association for the
purpose of eliminating Parkinson's disease through medical research and
public and professional education related to such disease;
(8) the national kidney foundation of Kansas and western Missouri
for the purpose of eliminating kidney disease through medical research
and public and private education related to such disease;
(9) the heartstrings community foundation for the purpose of
providing training, employment and activities for adults with
developmental disabilities;
(10) the cystic fibrosis foundation, heart of America chapter, for the
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purposes of assuring the development of the means to cure and control
cystic fibrosis and improving the quality of life for those with the disease;
(11) the spina bifida association of Kansas for the purpose of
providing financial, educational and practical aid to families and
individuals with spina bifida. Such aid includes, but is not limited to,
funding for medical devices, counseling and medical educational
opportunities;
(12) the CHWC, Inc., for the purpose of rebuilding urban core
neighborhoods through the construction of new homes, acquiring and
renovating existing homes and other related activities, and promoting
economic development in such neighborhoods;
(13) the cross-lines cooperative council for the purpose of providing
social services to low income individuals and families;
(14) the dreams work, inc., for the purpose of providing young adult
day services to individuals with developmental disabilities and assisting
families in avoiding institutional or nursing home care for a
developmentally disabled member of their family;
(15) the KSDS, Inc., for the purpose of promoting the independence
and inclusion of people with disabilities as fully participating and
contributing members of their communities and society through the
training and providing of guide and service dogs to people with
disabilities, and providing disability education and awareness to the
general public;
(16) the lyme association of greater Kansas City, Inc., for the purpose
of providing support to persons with lyme disease and public education
relating to the prevention, treatment and cure of lyme disease;
(17) the dream factory, inc., for the purpose of granting the dreams of
children with critical and chronic illnesses;
(18) the Ottawa Suzuki strings, inc., for the purpose of providing
students and families with education and resources necessary to enable
each child to develop fine character and musical ability to the fullest
potential;
(19) the international association of lions clubs for the purpose of
creating and fostering a spirit of understanding among all people for
humanitarian needs by providing voluntary services through community
involvement and international cooperation;
(20) the Johnson county young matrons, inc., for the purpose of
promoting a positive future for members of the community through
volunteerism, financial support and education through the efforts of an all
volunteer organization;
(21) the American cancer society, inc., for the purpose of eliminating
cancer as a major health problem by preventing cancer, saving lives and
diminishing suffering from cancer, through research, education, advocacy
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and service;
(22) the community services of Shawnee, inc., for the purpose of
providing food and clothing to those in need;
(23) the angel babies association, for the purpose of providing
assistance, support and items of necessity to teenage mothers and their
babies; and
(24) the Kansas fairgrounds foundation for the purpose of the
preservation, renovation and beautification of the Kansas state fairgrounds;
(ww) all sales of tangible personal property purchased by the habitat
for humanity for the exclusive use of being incorporated within a housing
project constructed by such organization;
(xx) all sales of tangible personal property and services purchased by
a nonprofit zoo that is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, or on behalf
of such zoo by an entity itself exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986
contracted with to operate such zoo and all sales of tangible personal
property or services purchased by a contractor for the purpose of
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any nonprofit zoo that would be
exempt from taxation under the provisions of this section if purchased
directly by such nonprofit zoo or the entity operating such zoo. Nothing in
this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities for any nonprofit zoo. When any nonprofit zoo shall contract for
the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities, it shall obtain
from the state and furnish to the contractor an exemption certificate for the
project involved, and the contractor may purchase materials for
incorporation in such project. The contractor shall furnish the number of
such certificate to all suppliers from whom such purchases are made, and
such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project the contractor
shall furnish to the nonprofit zoo concerned a sworn statement, on a form
to be provided by the director of taxation, that all purchases so made were
entitled to exemption under this subsection. All invoices shall be held by
the contractor for a period of five years and shall be subject to audit by the
director of taxation. If any materials purchased under such a certificate are
found not to have been incorporated in the building or other project or not
to have been returned for credit or the sales or compensating tax otherwise
imposed upon such materials that will not be so incorporated in the
building or other project reported and paid by such contractor to the
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director of taxation not later than the 20 th day of the month following the
close of the month in which it shall be determined that such materials will
not be used for the purpose for which such certificate was issued, the
nonprofit zoo concerned shall be liable for tax on all materials purchased
for the project, and upon payment thereof it may recover the same from
the contractor together with reasonable attorney fees. Any contractor or
any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(yy) all sales of tangible personal property and services purchased by
a parent-teacher association or organization, and all sales of tangible
personal property by or on behalf of such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-air,
free access radio or television station that is used directly and primarily for
the purpose of producing a broadcast signal or is such that the failure of
the machinery or equipment to operate would cause broadcasting to cease.
For purposes of this subsection, machinery and equipment shall include,
but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are
essential or necessary for the purpose of producing a broadcast signal or is
such that the failure of the electricity would cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by
a religious organization that is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code, and used
exclusively for religious purposes, and all sales of tangible personal
property or services purchased by a contractor for the purpose of
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such organization that would be
exempt from taxation under the provisions of this section if purchased
directly by such organization. Nothing in this subsection shall be deemed
to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any such organization.
When any such organization shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
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whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be so incorporated in the building or other project
reported and paid by such contractor to the director of taxation not later
than the 20th day of the month following the close of the month in which it
shall be determined that such materials will not be used for the purpose for
which such certificate was issued, such organization concerned shall be
liable for tax on all materials purchased for the project, and upon payment
thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto.
Sales tax paid on and after July 1, 1998, but prior to the effective date of
this act upon the gross receipts received from any sale exempted by the
amendatory provisions of this subsection shall be refunded. Each claim for
a sales tax refund shall be verified and submitted to the director of taxation
upon forms furnished by the director and shall be accompanied by any
additional documentation required by the director. The director shall
review each claim and shall refund that amount of sales tax paid as
determined under the provisions of this subsection. All refunds shall be
paid from the sales tax refund fund upon warrants of the director of
accounts and reports pursuant to vouchers approved by the director or the
director's designee;
(bbb) all sales of food for human consumption by an organization that
is exempt from federal income taxation pursuant to section 501(c)(3) of
the federal internal revenue code of 1986, pursuant to a food distribution
program that offers such food at a price below cost in exchange for the
performance of community service by the purchaser thereof;
(ccc) on and after July 1, 1999, all sales of tangible personal property
and services purchased by a primary care clinic or health center the
primary purpose of which is to provide services to medically underserved
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individuals and families, and that is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code, and all
sales of tangible personal property or services purchased by a contractor
for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any such clinic
or center that would be exempt from taxation under the provisions of this
section if purchased directly by such clinic or center, except that for
taxable years commencing after December 31, 2013, this subsection shall
not apply to any sales of such tangible personal property and services
purchased by a primary care clinic or health center which performs any
abortion, as defined in K.S.A. 65-6701, and amendments thereto. Nothing
in this subsection shall be deemed to exempt the purchase of any
construction machinery, equipment or tools used in the constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for any such clinic or center. When any such clinic or
center shall contract for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to such clinic or center concerned a
sworn statement, on a form to be provided by the director of taxation, that
all purchases so made were entitled to exemption under this subsection.
All invoices shall be held by the contractor for a period of five years and
shall be subject to audit by the director of taxation. If any materials
purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or
the sales or compensating tax otherwise imposed upon such materials that
will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20 th
day of the month following the close of the month in which it shall be
determined that such materials will not be used for the purpose for which
such certificate was issued, such clinic or center concerned shall be liable
for tax on all materials purchased for the project, and upon payment
thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
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of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(ddd) on and after January 1, 1999, and before January 1, 2000, all
sales of materials and services purchased by any class II or III railroad as
classified by the federal surface transportation board for the construction,
renovation, repair or replacement of class II or III railroad track and
facilities used directly in interstate commerce. In the event any such track
or facility for which materials and services were purchased sales tax
exempt is not operational for five years succeeding the allowance of such
exemption, the total amount of sales tax that would have been payable
except for the operation of this subsection shall be recouped in accordance
with rules and regulations adopted for such purpose by the secretary of
revenue;
(eee) on and after January 1, 1999, and before January 1, 2001, all
sales of materials and services purchased for the original construction,
reconstruction, repair or replacement of grain storage facilities, including
railroad sidings providing access thereto;
(fff) all sales of material handling equipment, racking systems and
other related machinery and equipment that is used for the handling,
movement or storage of tangible personal property in a warehouse or
distribution facility in this state; all sales of installation, repair and
maintenance services performed on such machinery and equipment; and
all sales of repair and replacement parts for such machinery and
equipment. For purposes of this subsection, a warehouse or distribution
facility means a single, fixed location that consists of buildings or
structures in a contiguous area where storage or distribution operations are
conducted that are separate and apart from the business' retail operations,
if any, and that do not otherwise qualify for exemption as occurring at a
manufacturing or processing plant or facility. Material handling and
storage equipment shall include aeration, dust control, cleaning, handling
and other such equipment that is used in a public grain warehouse or other
commercial grain storage facility, whether used for grain handling, grain
storage, grain refining or processing, or other grain treatment operation;
(ggg) all sales of tangible personal property and services purchased
by or on behalf of the Kansas academy of science, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, and used solely by such academy for the
preparation, publication and dissemination of education materials;
(hhh) all sales of tangible personal property and services purchased
by or on behalf of all domestic violence shelters that are member agencies
of the Kansas coalition against sexual and domestic violence;
(iii) all sales of personal property and services purchased by an
organization that is exempt from federal income taxation pursuant to
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section 501(c)(3) of the federal internal revenue code of 1986, and such
personal property and services are used by any such organization in the
collection, storage and distribution of food products to nonprofit
organizations that distribute such food products to persons pursuant to a
food distribution program on a charitable basis without fee or charge, and
all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities used
for the collection and storage of such food products for any such
organization which is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, that would
be exempt from taxation under the provisions of this section if purchased
directly by such organization. Nothing in this subsection shall be deemed
to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any such organization.
When any such organization shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in such facilities or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials that will
not be so incorporated in such facilities reported and paid by such
contractor to the director of taxation not later than the 20 th day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, such organization concerned shall be liable for tax
on all materials purchased for the project, and upon payment thereof it
may recover the same from the contractor together with reasonable
attorney fees. Any contractor or any agent, employee or subcontractor
thereof, who shall use or otherwise dispose of any materials purchased
under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax
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otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for
in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and after
July 1, 2005, but prior to the effective date of this act upon the gross
receipts received from any sale exempted by the amendatory provisions of
this subsection shall be refunded. Each claim for a sales tax refund shall be
verified and submitted to the director of taxation upon forms furnished by
the director and shall be accompanied by any additional documentation
required by the director. The director shall review each claim and shall
refund that amount of sales tax paid as determined under the provisions of
this subsection. All refunds shall be paid from the sales tax refund fund
upon warrants of the director of accounts and reports pursuant to vouchers
approved by the director or the director's designee;
(jjj) all sales of dietary supplements dispensed pursuant to a
prescription order by a licensed practitioner or a mid-level practitioner as
defined by K.S.A. 65-1626, and amendments thereto. As used in this
subsection, "dietary supplement" means any product, other than tobacco,
intended to supplement the diet that: (1) Contains one or more of the
following dietary ingredients: A vitamin, a mineral, an herb or other
botanical, an amino acid, a dietary substance for use by humans to
supplement the diet by increasing the total dietary intake or a concentrate,
metabolite, constituent, extract or combination of any such ingredient; (2)
is intended for ingestion in tablet, capsule, powder, softgel, gelcap or
liquid form, or if not intended for ingestion, in such a form, is not
represented as conventional food and is not represented for use as a sole
item of a meal or of the diet; and (3) is required to be labeled as a dietary
supplement, identifiable by the supplemental facts box found on the label
and as required pursuant to 21 C.F.R. § 101.36;
(lll) all sales of tangible personal property and services purchased by
special olympics Kansas, inc. for the purpose of providing year-round
sports training and athletic competition in a variety of olympic-type sports
for individuals with intellectual disabilities by giving them continuing
opportunities to develop physical fitness, demonstrate courage, experience
joy and participate in a sharing of gifts, skills and friendship with their
families, other special olympics athletes and the community, and activities
provided or sponsored by such organization, and all sales of tangible
personal property by or on behalf of any such organization;
(mmm) all sales of tangible personal property purchased by or on
behalf of the Marillac center, inc., which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing psycho-social-biological and special
education services to children, and all sales of any such property by or on
behalf of such organization for such purpose;
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(nnn) all sales of tangible personal property and services purchased
by the west Sedgwick county-sunrise rotary club and sunrise charitable
fund for the purpose of constructing a boundless playground which is an
integrated, barrier free and developmentally advantageous play
environment for children of all abilities and disabilities;
(ooo) all sales of tangible personal property by or on behalf of a
public library serving the general public and supported in whole or in part
with tax money or a not-for-profit organization whose purpose is to raise
funds for or provide services or other benefits to any such public library;
(ppp) all sales of tangible personal property and services purchased
by or on behalf of a homeless shelter that is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal income tax code of
1986, and used by any such homeless shelter to provide emergency and
transitional housing for individuals and families experiencing
homelessness, and all sales of any such property by or on behalf of any
such homeless shelter for any such purpose;
(qqq) all sales of tangible personal property and services purchased
by TLC for children and families, inc., hereinafter referred to as TLC,
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and such property and
services are used for the purpose of providing emergency shelter and
treatment for abused and neglected children as well as meeting additional
critical needs for children, juveniles and family, and all sales of any such
property by or on behalf of TLC for any such purpose; and all sales of
tangible personal property or services purchased by a contractor for the
purpose of constructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for the operation of services for TLC for any such
purpose that would be exempt from taxation under the provisions of this
section if purchased directly by TLC. Nothing in this subsection shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities for TLC. When TLC contracts for
the purpose of constructing, maintaining, repairing, enlarging, furnishing
or remodeling such facilities, it shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to TLC a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
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be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the
building or other project or not to have been returned for credit or the sales
or compensating tax otherwise imposed upon such materials that will not
be so incorporated in the building or other project reported and paid by
such contractor to the director of taxation not later than the 20 th day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, TLC shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the
same from the contractor together with reasonable attorney fees. Any
contractor or any agent, employee or subcontractor thereof, who shall use
or otherwise dispose of any materials purchased under such a certificate
for any purpose other than that for which such a certificate is issued
without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(rrr) all sales of tangible personal property and services purchased by
any county law library maintained pursuant to law and sales of tangible
personal property and services purchased by an organization that would
have been exempt from taxation under the provisions of this subsection if
purchased directly by the county law library for the purpose of providing
legal resources to attorneys, judges, students and the general public, and
all sales of any such property by or on behalf of any such county law
library;
(sss) all sales of tangible personal property and services purchased by
catholic charities or youthville, hereinafter referred to as charitable family
providers, which is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, and which
such property and services are used for the purpose of providing
emergency shelter and treatment for abused and neglected children as well
as meeting additional critical needs for children, juveniles and family, and
all sales of any such property by or on behalf of charitable family
providers for any such purpose; and all sales of tangible personal property
or services purchased by a contractor for the purpose of constructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for
the operation of services for charitable family providers for any such
purpose which would be exempt from taxation under the provisions of this
section if purchased directly by charitable family providers. Nothing in
this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, maintaining,
repairing, enlarging, furnishing or remodeling such facilities for charitable
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family providers. When charitable family providers contracts for the
purpose of constructing, maintaining, repairing, enlarging, furnishing or
remodeling such facilities, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to charitable family
providers a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be so incorporated in the building or other project
reported and paid by such contractor to the director of taxation not later
than the 20th day of the month following the close of the month in which it
shall be determined that such materials will not be used for the purpose for
which such certificate was issued, charitable family providers shall be
liable for tax on all materials purchased for the project, and upon payment
thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(ttt) all sales of tangible personal property or services purchased by a
contractor for a project for the purpose of restoring, constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling a home or facility owned by a nonprofit museum that has been
granted an exemption pursuant to subsection (qq), which such home or
facility is located in a city that has been designated as a qualified
hometown pursuant to the provisions of K.S.A. 75-5071 et seq., and
amendments thereto, and which such project is related to the purposes of
K.S.A. 75-5071 et seq., and amendments thereto, and that would be
exempt from taxation under the provisions of this section if purchased
directly by such nonprofit museum. Nothing in this subsection shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the restoring, constructing, equipping, reconstructing,
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maintaining, repairing, enlarging, furnishing or remodeling a home or
facility for any such nonprofit museum. When any such nonprofit museum
shall contract for the purpose of restoring, constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
a home or facility, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificates to all suppliers
from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon
completion of the project, the contractor shall furnish to such nonprofit
museum a sworn statement on a form to be provided by the director of
taxation that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be so incorporated in a home or facility or other
project reported and paid by such contractor to the director of taxation not
later than the 20 th day of the month following the close of the month in
which it shall be determined that such materials will not be used for the
purpose for which such certificate was issued, such nonprofit museum
shall be liable for tax on all materials purchased for the project, and upon
payment thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(uuu) all sales of tangible personal property and services purchased
by Kansas children's service league, hereinafter referred to as KCSL,
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and which such property
and services are used for the purpose of providing for the prevention and
treatment of child abuse and maltreatment as well as meeting additional
critical needs for children, juveniles and family, and all sales of any such
property by or on behalf of KCSL for any such purpose; and all sales of
tangible personal property or services purchased by a contractor for the
purpose of constructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for the operation of services for KCSL for any such
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purpose that would be exempt from taxation under the provisions of this
section if purchased directly by KCSL. Nothing in this subsection shall be
deemed to exempt the purchase of any construction machinery, equipment
or tools used in the constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities for KCSL. When KCSL contracts
for the purpose of constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved,
and the contractor may purchase materials for incorporation in such
project. The contractor shall furnish the number of such certificate to all
suppliers from whom such purchases are made, and such suppliers shall
execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to KCSL a
sworn statement, on a form to be provided by the director of taxation, that
all purchases so made were entitled to exemption under this subsection.
All invoices shall be held by the contractor for a period of five years and
shall be subject to audit by the director of taxation. If any materials
purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or
the sales or compensating tax otherwise imposed upon such materials that
will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20 th
day of the month following the close of the month in which it shall be
determined that such materials will not be used for the purpose for which
such certificate was issued, KCSL shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the
same from the contractor together with reasonable attorney fees. Any
contractor or any agent, employee or subcontractor thereof, who shall use
or otherwise dispose of any materials purchased under such a certificate
for any purpose other than that for which such a certificate is issued
without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(vvv) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property or services, purchased by
jazz in the woods, inc., a Kansas corporation that is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal
revenue code, for the purpose of providing jazz in the woods, an event
benefiting children-in-need and other nonprofit charities assisting such
children, and all sales of any such property by or on behalf of such
organization for such purpose;
(www) all sales of tangible personal property purchased by or on
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behalf of the Frontenac education foundation, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code, for the purpose of providing education support for
students, and all sales of any such property by or on behalf of such
organization for such purpose;
(xxx) all sales of personal property and services purchased by the
booth theatre foundation, inc., an organization, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, and which such personal property and
services are used by any such organization in the constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
of the booth theatre, and all sales of tangible personal property or services
purchased by a contractor for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
the booth theatre for such organization, that would be exempt from
taxation under the provisions of this section if purchased directly by such
organization. Nothing in this subsection shall be deemed to exempt the
purchase of any construction machinery, equipment or tools used in the
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such organization. When any
such organization shall contract for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to such organization concerned a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in such
facilities or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials that will not be
so incorporated in such facilities reported and paid by such contractor to
the director of taxation not later than the 20 th day of the month following
the close of the month in which it shall be determined that such materials
will not be used for the purpose for which such certificate was issued, such
organization concerned shall be liable for tax on all materials purchased
for the project, and upon payment thereof it may recover the same from
the contractor together with reasonable attorney fees. Any contractor or
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any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto. Sales tax paid on and after January 1, 2007, but prior
to the effective date of this act upon the gross receipts received from any
sale which would have been exempted by the provisions of this subsection
had such sale occurred after the effective date of this act shall be refunded.
Each claim for a sales tax refund shall be verified and submitted to the
director of taxation upon forms furnished by the director and shall be
accompanied by any additional documentation required by the director.
The director shall review each claim and shall refund that amount of sales
tax paid as determined under the provisions of this subsection. All refunds
shall be paid from the sales tax refund fund upon warrants of the director
of accounts and reports pursuant to vouchers approved by the director or
the director's designee;
(yyy) all sales of tangible personal property and services purchased
by TLC charities foundation, inc., hereinafter referred to as TLC charities,
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and which such property
and services are used for the purpose of encouraging private philanthropy
to further the vision, values, and goals of TLC for children and families,
inc.; and all sales of such property and services by or on behalf of TLC
charities for any such purpose and all sales of tangible personal property or
services purchased by a contractor for the purpose of constructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for
the operation of services for TLC charities for any such purpose that would
be exempt from taxation under the provisions of this section if purchased
directly by TLC charities. Nothing in this subsection shall be deemed to
exempt the purchase of any construction machinery, equipment or tools
used in the constructing, maintaining, repairing, enlarging, furnishing or
remodeling such facilities for TLC charities. When TLC charities contracts
for the purpose of constructing, maintaining, repairing, enlarging,
furnishing or remodeling such facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved,
and the contractor may purchase materials for incorporation in such
project. The contractor shall furnish the number of such certificate to all
suppliers from whom such purchases are made, and such suppliers shall
execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to TLC
charities a sworn statement, on a form to be provided by the director of
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taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials that will not be incorporated into the building or other project
reported and paid by such contractor to the director of taxation not later
than the 20th day of the month following the close of the month in which it
shall be determined that such materials will not be used for the purpose for
which such certificate was issued, TLC charities shall be liable for tax on
all materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney
fees. Any contractor or any agent, employee or subcontractor thereof, who
shall use or otherwise dispose of any materials purchased under such a
certificate for any purpose other than that for which such a certificate is
issued without the payment of the sales or compensating tax otherwise
imposed upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in K.S.A.
79-3615(h), and amendments thereto;
(zzz) all sales of tangible personal property purchased by the rotary
club of shawnee foundation, which is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
as amended, used for the purpose of providing contributions to community
service organizations and scholarships;
(aaaa) all sales of personal property and services purchased by or on
behalf of victory in the valley, inc., which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing a cancer support group and services for
persons with cancer, and all sales of any such property by or on behalf of
any such organization for any such purpose;
(bbbb) all sales of entry or participation fees, charges or tickets by
Guadalupe health foundation, which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for such organization's annual fundraising event which purpose is to
provide health care services for uninsured workers;
(cccc) all sales of tangible personal property or services purchased by
or on behalf of wayside waifs, inc., which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing such organization's annual fundraiser, an
event whose purpose is to support the care of homeless and abandoned
animals, animal adoption efforts, education programs for children and
efforts to reduce animal over-population and animal welfare services, and
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all sales of any such property, including entry or participation fees or
charges, by or on behalf of such organization for such purpose;
(dddd) all sales of tangible personal property or services purchased
by or on behalf of goodwill industries or Easter seals of Kansas, inc., both
of which are exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code, for the purpose of providing
education, training and employment opportunities for people with
disabilities and other barriers to employment;
(eeee) all sales of tangible personal property or services purchased by
or on behalf of all American beef battalion, inc., which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code, for the purpose of educating, promoting and
participating as a contact group through the beef cattle industry in order to
carry out such projects that provide support and morale to members of the
United States armed forces and military services;
(ffff) all sales of tangible personal property and services purchased by
sheltered living, inc., which is exempt from federal income taxation
pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
and which such property and services are used for the purpose of
providing residential and day services for people with developmental
disabilities or intellectual disability, or both, and all sales of any such
property by or on behalf of sheltered living, inc., for any such purpose; and
all sales of tangible personal property or services purchased by a
contractor for the purpose of rehabilitating, constructing, maintaining,
repairing, enlarging, furnishing or remodeling homes and facilities for
sheltered living, inc., for any such purpose that would be exempt from
taxation under the provisions of this section if purchased directly by
sheltered living, inc. Nothing in this subsection shall be deemed to exempt
the purchase of any construction machinery, equipment or tools used in the
constructing, maintaining, repairing, enlarging, furnishing or remodeling
such homes and facilities for sheltered living, inc. When sheltered living,
inc., contracts for the purpose of rehabilitating, constructing, maintaining,
repairing, enlarging, furnishing or remodeling such homes and facilities, it
shall obtain from the state and furnish to the contractor an exemption
certificate for the project involved, and the contractor may purchase
materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing
the number of such certificate. Upon completion of the project the
contractor shall furnish to sheltered living, inc., a sworn statement, on a
form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held
by the contractor for a period of five years and shall be subject to audit by
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the director of taxation. If any materials purchased under such a certificate
are found not to have been incorporated in the building or other project or
not to have been returned for credit or the sales or compensating tax
otherwise imposed upon such materials that will not be so incorporated in
the building or other project reported and paid by such contractor to the
director of taxation not later than the 20 th day of the month following the
close of the month in which it shall be determined that such materials will
not be used for the purpose for which such certificate was issued, sheltered
living, inc., shall be liable for tax on all materials purchased for the
project, and upon payment thereof it may recover the same from the
contractor together with reasonable attorney fees. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(gggg) all sales of game birds for which the primary purpose is use in
hunting;
(hhhh) all sales of tangible personal property or services purchased
on or after July 1, 2014, for the purpose of and in conjunction with
constructing, reconstructing, enlarging or remodeling a business identified
under the North American industry classification system (NAICS)
subsectors 1123, 1124, 112112, 112120 or 112210, and the sale and
installation of machinery and equipment purchased for installation at any
such business. The exemption provided in this subsection shall not apply
to projects that have actual total costs less than $50,000. When a person
contracts for the construction, reconstruction, enlargement or remodeling
of any such business, such person shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the
contractor may purchase materials, machinery and equipment for
incorporation in such project. The contractor shall furnish the number of
such certificates to all suppliers from whom such purchases are made, and
such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project, the contractor
shall furnish to the owner of the business a sworn statement, on a form to
be provided by the director of taxation, that all purchases so made were
entitled to exemption under this subsection. All invoices shall be held by
the contractor for a period of five years and shall be subject to audit by the
director of taxation. Any contractor or any agent, employee or
subcontractor of the contractor, who shall use or otherwise dispose of any
materials, machinery or equipment purchased under such a certificate for
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any purpose other than that for which such a certificate is issued without
the payment of the sales or compensating tax otherwise imposed thereon,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(iiii) all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for the operation of services
for Wichita children's home for any such purpose that would be exempt
from taxation under the provisions of this section if purchased directly by
Wichita children's home. Nothing in this subsection shall be deemed to
exempt the purchase of any construction machinery, equipment or tools
used in the constructing, maintaining, repairing, enlarging, furnishing or
remodeling such facilities for Wichita children's home. When Wichita
children's home contracts for the purpose of constructing, maintaining,
repairing, enlarging, furnishing or remodeling such facilities, it shall obtain
from the state and furnish to the contractor an exemption certificate for the
project involved, and the contractor may purchase materials for
incorporation in such project. The contractor shall furnish the number of
such certificate to all suppliers from whom such purchases are made, and
such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project, the contractor
shall furnish to Wichita children's home a sworn statement, on a form to be
provided by the director of taxation, that all purchases so made were
entitled to exemption under this subsection. All invoices shall be held by
the contractor for a period of five years and shall be subject to audit by the
director of taxation. If any materials purchased under such a certificate are
found not to have been incorporated in the building or other project or not
to have been returned for credit or the sales or compensating tax otherwise
imposed upon such materials that will not be so incorporated in the
building or other project reported and paid by such contractor to the
director of taxation not later than the 20 th day of the month following the
close of the month in which it shall be determined that such materials will
not be used for the purpose for which such certificate was issued, Wichita
children's home shall be liable for the tax on all materials purchased for the
project, and upon payment, it may recover the same from the contractor
together with reasonable attorney fees. Any contractor or any agent,
employee or subcontractor, who shall use or otherwise dispose of any
materials purchased under such a certificate for any purpose other than that
for which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction, shall be subject to the penalties
provided for in K.S.A. 79-3615(h), and amendments thereto;
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(jjjj) all sales of tangible personal property or services purchased by
or on behalf of the beacon, inc., that is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code,
for the purpose of providing those desiring help with food, shelter, clothing
and other necessities of life during times of special need;
(kkkk) all sales of tangible personal property and services purchased
by or on behalf of reaching out from within, inc., which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code, for the purpose of sponsoring self-help programs for
incarcerated persons that will enable such incarcerated persons to become
role models for non-violence while in correctional facilities and productive
family members and citizens upon return to the community;
(llll) all sales of tangible personal property and services purchased by
Gove county healthcare endowment foundation, inc., which is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, and which such property and services are
used for the purpose of constructing and equipping an airport in Quinter,
Kansas, and all sales of tangible personal property or services purchased
by a contractor for the purpose of constructing and equipping an airport in
Quinter, Kansas, for such organization, that would be exempt from
taxation under the provisions of this section if purchased directly by such
organization. Nothing in this subsection shall be deemed to exempt the
purchase of any construction machinery, equipment or tools used in the
constructing or equipping of facilities for such organization. When such
organization shall contract for the purpose of constructing or equipping an
airport in Quinter, Kansas, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from
whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon
completion of the project, the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of
taxation, that all purchases so made were entitled to exemption under this
subsection. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in such facilities or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials that will
not be so incorporated in such facilities reported and paid by such
contractor to the director of taxation no later than the 20 th day of the month
following the close of the month in which it shall be determined that such
materials will not be used for the purpose for which such certificate was
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issued, such organization concerned shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the
same from the contractor together with reasonable attorney fees. Any
contractor or any agent, employee or subcontractor thereof, who purchased
under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax
otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for
in K.S.A. 79-3615(h), and amendments thereto. The provisions of this
subsection shall expire and have no effect on and after July 1, 2019;
(mmmm) all sales of gold or silver coins; and palladium, platinum,
gold or silver bullion. For the purposes of this subsection, "bullion" means
bars, ingots or commemorative medallions of gold, silver, platinum,
palladium, or a combination thereof, for which the value of the metal
depends on its content and not the form;
(nnnn) all sales of tangible personal property or services purchased
by friends of hospice of Jefferson county, an organization that is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, for the purpose of providing support to the
Jefferson county hospice agency in end-of-life care of Jefferson county
families, friends and neighbors, and all sales of entry or participation fees,
charges or tickets by friends of hospice of Jefferson county for such
organization's fundraising event for such purpose;
(oooo) all sales of tangible personal property or services purchased
for the purpose of and in conjunction with constructing, reconstructing,
enlarging or remodeling a qualified business facility by a qualified firm or
qualified supplier that meets the requirements established in K.S.A. 2024
Supp. 74-50,312 and 74-50,319, and amendments thereto, and that has
been approved for a project exemption certificate by the secretary of
commerce, and the sale and installation of machinery and equipment
purchased by such qualified firm or qualified supplier for installation at
any such qualified business facility. When a person shall contract for the
construction, reconstruction, enlargement or remodeling of any such
qualified business facility, such person shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved,
and the contractor may purchase materials, machinery and equipment for
incorporation in such project. The contractor shall furnish the number of
such certificates to all suppliers from whom such purchases are made, and
such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project, the contractor
shall furnish to the owner of the qualified firm or qualified supplier a
sworn statement, on a form to be provided by the director of taxation, that
all purchases so made were entitled to exemption under this subsection.
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All invoices shall be held by the contractor for a period of five years and
shall be subject to audit by the director of taxation. Any contractor or any
agent, employee or subcontractor thereof who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a
certificate for any purpose other than that for which such a certificate is
issued without the payment of the sales or compensating tax otherwise
imposed thereon, shall be guilty of a misdemeanor and, upon conviction
therefor, shall be subject to the penalties provided for in K.S.A. 79-
3615(h), and amendments thereto. As used in this subsection, "qualified
business facility," "qualified firm" and "qualified supplier" mean the same
as defined in K.S.A. 2024 Supp. 74-50,311, and amendments thereto;
(pppp) (1) all sales of tangible personal property or services
purchased by a not-for-profit corporation that is designated as an area
agency on aging by the secretary for aging and disabilities services and is
exempt from federal income taxation pursuant to section 501(c)(3) of the
federal internal revenue code for the purpose of coordinating and
providing seniors and those living with disabilities with services that
promote person-centered care, including home-delivered meals,
congregate meal settings, long-term case management, transportation,
information, assistance and other preventative and intervention services to
help service recipients remain in their homes and communities or for the
purpose of constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for such area agency on
aging; and
(2) all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for an
area agency on aging that would be exempt from taxation under the
provisions of this section if purchased directly by such area agency on
aging. Nothing in this paragraph shall be deemed to exempt the purchase
of any construction machinery, equipment or tools used in the
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for an area agency on aging. When an
area agency on aging contracts for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and such contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
same bearing the number of such certificate. Upon completion of the
project, the contractor shall furnish to such area agency on aging a sworn
statement, on a form to be provided by the director of taxation, that all
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purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the
building or other project or not to have been returned for credit or the sales
or compensating tax otherwise imposed upon such materials that will not
be so incorporated in the building or other project reported and paid by
such contractor to the director of taxation not later than the 20 th day of the
month following the close of the month in which it shall be determined
that such materials will not be used for the purpose for which such
certificate was issued, the area agency on aging concerned shall be liable
for tax on all materials purchased for the project, and upon payment
thereof, the area agency on aging may recover the same from the
contractor together with reasonable attorney fees. Any contractor or any
agent, employee or subcontractor thereof who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto;
(qqqq) all sales of tangible personal property or services purchased
by Kansas suicide prevention HQ, inc., an organization that is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, for the purpose of bringing suicide
prevention training and awareness to communities across the state;
(rrrr) all sales of the services of slaughtering, butchering, custom
cutting, dressing, processing and packaging of an animal for human
consumption when the animal is delivered or furnished by a customer that
owns the animal and such meat or poultry is for use or consumption by
such customer;
(ssss) all sales of tangible personal property or services purchased by
or on behalf of doorstep inc., an organization that is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal
revenue code of 1986, for the purpose of providing short-term emergency
aid to families and individuals in need, including assistance with food,
clothing, rent, prescription medications, transportation and utilities, and
providing information on services to promote long-term self-sufficiency;
(tttt) on and after January 1, 2024, all sales of tangible personal
property or services purchased by exploration place, inc., an organization
that is exempt from federal income taxation pursuant to section 501(c)(3)
of the federal internal revenue code, and which such property and services
are used for the purpose of constructing, remodeling, furnishing or
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equipping a riverfront amphitheater, a destination playscape, an education
center and indoor renovations at exploration place in Wichita, Kansas, all
sales of tangible personal property or services purchased by Kansas
children's discovery center inc. in Topeka, Kansas, and which such
property and services are used for the purpose of constructing, remodeling,
furnishing or equipping projects that include indoor-outdoor classrooms,
an expanded multi-media gallery, a workshop and loading dock and safety
upgrades such as a tornado shelter, lactation room, first aid room and
sensory room and all sales of tangible personal property or services
purchased by a contractor for the purpose of constructing, remodeling,
furnishing or equipping such projects, for such organizations, that would
be exempt from taxation under the provisions of this section if purchased
directly by such organizations. Nothing in this subsection shall be deemed
to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, remodeling, furnishing or equipping of facilities
for such organization. When such organization shall contract for the
purpose of constructing, remodeling, furnishing or equipping such
projects, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
same bearing the number of such certificate. Upon completion of the
project, the contractor shall furnish to such organization a sworn statement,
on a form to be provided by the director of taxation, that all purchases so
made were entitled to exemption under this subsection. All invoices shall
be held by the contractor for a period of five years and shall be subject to
audit by the director of taxation. If any materials purchased under such a
certificate are found not to have been incorporated in such facilities or not
to have been returned for credit or the sales or compensating tax otherwise
imposed upon such materials that will not be so incorporated in such
facilities reported and paid by such contractor to the director of taxation no
later than the 20 th day of the month following the close of the month in
which it shall be determined that such materials will not be used for the
purpose for which such certificate was issued, such organization shall be
liable for tax on all materials purchased for the project, and upon payment
thereof may recover the same from the contractor together with reasonable
attorney fees. Any contractor or agent, employee or subcontractor thereof,
who purchased under such a certificate for any purpose other than that for
which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty
of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in K.S.A. 79-3615(h), and amendments thereto.
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HB 2308 57
Sales tax paid on and after January 1, 2024, but prior to the effective date
of this act, upon the gross receipts received from any sale exempted by the
amendatory provisions of this subsection shall be refunded. Each claim for
a sales tax refund shall be verified and submitted to the director of taxation
upon forms furnished by the director and shall be accompanied by any
additional documentation required by the director. The director shall
review each claim and shall refund that amount of sales tax paid as
determined under the provisions of this subsection. All refunds shall be
paid from the sales tax refund fund upon warrants of the director of
accounts and reports pursuant to vouchers approved by the director or the
director's designee. The provisions of this subsection shall expire and have
no effect on and after December 31, 2030;
(uuuu) (1) (A) all sales of equipment, machinery, software, ancillary
components, appurtenances, accessories or other infrastructure purchased
for use in the provision of communications services; and
(B) all services purchased by a provider in the provision of the
communications service used in the repair, maintenance or installation in
such communications service.
(2) As used in this subsection:
(A) "Communications service" means internet access service,
telecommunications service, video service or any combination thereof.
(B) "Equipment, machinery, software, ancillary components,
appurtenances, accessories or other infrastructure" includes, but is not
limited to:
(i) Wires, cables, fiber, conduits, antennas, poles, switches, routers,
amplifiers, rectifiers, repeaters, receivers, multiplexers, duplexers,
transmitters, circuit cards, insulating and protective materials and cases,
power equipment, backup power equipment, diagnostic equipment, storage
devices, modems, cable modem termination systems and servers;
(ii) other general central office or headend equipment, such as
channel cards, frames and cabinets;
(iii) equipment used in successor technologies, including items used
to monitor, test, maintain, enable or facilitate qualifying equipment,
machinery, software, ancillary components, appurtenances and
accessories; and
(iv) other infrastructure that is used in whole or in part to provide
communications services, including broadcasting, distributing, sending,
receiving, storing, transmitting, retransmitting, amplifying, switching,
providing connectivity for or routing communications services.
(C) "Internet access service" means the same as internet access as
defined in section 1105 of the internet tax freedom act amendments of
2007, public law 110-108.
(D) "Provider" means a person or entity that sells communications
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HB 2308 58
service, including an affiliate or subsidiary.
(E) "Telecommunications service" means the same as defined in
K.S.A. 79-3602, and amendments thereto.
(F) "Video service" means the same as defined in K.S.A. 12-2022,
and amendments thereto.
(3) The provisions of this subsection shall expire and have no effect
on and after July 1, 2029;
(vvvv) (1) all sales of tangible personal property or services
purchased by a contractor for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
a building that is operated by, or is intended to be operated by, the Kansas
fairgrounds foundation, a not-for-profit corporation exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal
revenue code of 1986, and located on the grounds of the Kansas state fair,
and such tangible personal property would be exempt from taxation under
the provisions of this paragraph if purchased directly by such eligible not-
for-profit corporation. Nothing in this subsection shall be deemed to
exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling a building for such eligible not-for-
profit corporation. When such eligible not-for-profit corporation contracts
for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling a building, such corporation
shall obtain from the state and furnish to the contractor an exemption
certificate for the project involved, and such contractor may purchase
materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering such purchases
bearing the number of such certificate. Upon completion of the project, the
contractor shall furnish to such eligible not-for-profit corporation a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall
be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the
building or returned for credit, the contractor shall report and pay the sales
or compensating tax to the director of taxation not later than the 20th day of
the month following the close of the month in which it is determined that
such materials will not be used for the purpose for which such certificate
was issued. The eligible not-for-profit corporation concerned shall be
liable for tax on all materials purchased for the project, and upon payment
thereof, the eligible not-for-profit corporation may recover the same from
the contractor together with reasonable attorney fees. Any contractor or
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HB 2308 59
any agent, employee or subcontractor thereof who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment
of the sales or compensating tax otherwise imposed upon such materials
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto.
(2) Sales tax paid on and after May 19, 2023, but prior to the effective
date of this act upon the gross receipts received from any sale which would
have been exempted by the provisions of this subsection had such sale
occurred after the effective date of this act shall be refunded. Each claim
for a sales tax refund shall be verified and submitted to the director of
taxation upon forms furnished by the director and shall be accompanied by
any additional documentation required by the director. The director shall
review each claim and shall refund that amount of sales tax paid as
determined under the provisions of this subsection. All refunds shall be
paid from the sales tax refund fund upon warrants of the director of
accounts and reports pursuant to vouchers approved by the director or the
director's designee; and
(wwww) (1) all sales of tangible personal property or services
purchased by a pregnancy resource center or residential maternity facility.
(2) As used in this subsection, "pregnancy resource center" or
"residential maternity facility" means an organization that is:
(A) Exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986;
(B) a nonprofit organization organized under the laws of this state;
and
(C) a pregnancy resource center or residential maternity facility that:
(i) Maintains a dedicated phone number for clients;
(ii) maintains in this state its primary physical office, clinic or
residential home that is open for clients for a minimum of 20 hours per
week, excluding state holidays;
(iii) offers services, at no cost to the client, for the express purpose of
providing assistance to women in order to carry their pregnancy to term,
encourage parenting or adoption, prevent abortion and promote healthy
childbirth; and
(iv) utilizes trained healthcare providers, as defined by K.S.A. 2024
Supp. 79-32,316, and amendments thereto, to perform any available
medical procedures; and
(xxxx) all sales of tangible personal property or services purchased
for the purpose of and in conjunction with constructing, reconstructing,
enlarging or remodeling a qualified business facility by a qualified
company that meets the requirements established in sections 2 and 7, and
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amendments thereto, and that has been approved for a project exemption
certificate by the secretary of commerce, and the sale and installation of
machinery and equipment purchased by such qualified company for
installation at any such qualified business facility. When a person
contracts for the construction, reconstruction, enlargement or remodeling
of any such qualified business facility, such person shall obtain from the
state and furnish to the contractor an exemption certificate for the project
involved, and the contractor may purchase materials, machinery and
equipment for incorporation in such project. The contractor shall furnish
the number of such certificates to all suppliers from whom such purchases
are made, and such suppliers shall execute invoices covering such
purchases bearing the number of such certificate. Upon completion of the
project, the contractor shall furnish to the owner of the qualified firm or
qualified supplier a sworn statement, on a form to be provided by the
director of taxation, that all purchases so made were entitled to exemption
under this subsection. All invoices shall be held by the contractor for a
period of five years and subject to audit by the director of taxation. If any
materials, machinery or equipment purchased under such a certificate are
found not to have been incorporated into the qualified business facility or
returned for credit, the contractor shall report and pay the sales or
compensating use tax to the director of taxation not later than the 20 th day
of the month following the close of the month in which a determination is
made that such materials, machinery or equipment will not be used for the
purpose for which such certificate was issued. The qualified company
shall be liable for tax on all materials, machinery or equipment purchased
for the project, and upon payment thereof, the qualified company may
recover the amount of the tax paid from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof who shall use or otherwise dispose of any materials,
machinery or equipment purchased under such a certificate for any
purpose other than that for which such certificate is issued without the
payment of the sales or compensating use tax otherwise imposed thereon,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in K.S.A. 79-3615(h), and
amendments thereto. As used in this subsection, "qualified company" and
"qualified business facility" mean the same as defined in section 1, and
amendments thereto.
Sec. 11. K.S.A. 2024 Supp. 79-3606 is hereby repealed.
Sec. 12. This act shall take effect and be in force from and after its
publication in the statute book.
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