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SENATE BILL No. 78
AN A CT concerning education; relating to postsecondary educational institutions;
requiring such institutions to regularly review and update accreditation policies;
prohibiting accrediting agencies from compelling such institutions to violate state
law; providing a cause of action for violations thereof; amending K.S.A. 8-1,142, 13-
13a46 and 74-32,120 and K.S.A. 2024 Supp. 58-3046a and 79-3602 and repealing
the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) The governing body of each postsecondary
educational institution shall regularly review and update the policies
and practices on accreditation of such institution.
(b) On or before December 31, 2025, each governing body of a
postsecondary educational institution shall:
(1) Identify the accrediting agencies or association eligible to
accredit such institution. Any such agencies or associations shall be
agencies or associations recognized by the United States department of
education in the database maintained by such department; and
(2) update the policies and practices on accreditation of such
institution to ensure that the institution may freely pursue accreditation
by any accrediting agency or association identified pursuant to
paragraph (1) that is appropriate for the programs offered by such
institution.
(c) No accrediting agency or association shall compel a
postsecondary educational institution to violate any state law. Any
adverse action taken against a postsecondary educational institution
based, in whole or in part, on such institution's compliance with any
state law shall constitute a violation of this section. Any such violation
may be enforced only to the extent that state law is not preempted by a
federal law recognizing the necessity of the accreditation standard or
requirement.
(d) A postsecondary educational institution that is negatively
affected by a violation of this section may bring a civil action against
the accrediting agency or association in a court of competent
jurisdiction in this state.
(e) If an accrediting agency or association violates this section, the
governing board of the affected postsecondary educational institution
shall notify the legislature in writing within 30 calendar days of such
violation.
(f) As used in this section, "postsecondary educational institution"
means a:
(1) State educational institution as defined in K.S.A 76-711, and
amendments thereto;
(2) private postsecondary educational institution as defined in
K.S.A. 74-32,163, and amendments thereto;
(3) municipal university as defined in K.S.A. 74-3201b, and
amendments thereto;
(4) not-for-profit institution of postsecondary education with its
main campus or principal place of operation in Kansas, is operated
independently and not controlled or administered by any state agency
or subdivision of the state, maintains open enrollment and is accredited
by a nationally recognized accrediting agency for higher education in
the United States; and
(5) community college as defined in K.S.A. 74-3201b, and
amendments thereto.
Sec. 2. K.S.A. 8-1,142 is hereby amended to read as follows: 8-
1,142. (a) As used in this section, "educational institution" means:
(1) Any state educational institution under the control and
supervision of the state board of regents;
(2) any municipal university;
(3) any not-for-profit independent institution of higher education
SENATE BILL No. 78—page 2
that is accredited by the north central association of colleges and
secondary schools accrediting agency based on its requirements as of
April 1, 1985 an accrediting agency or association recognized by the
United States department of education in the database maintained by
such department, is operated independently and not controlled or
administered by the state or any agency or subdivision thereof,
maintains open enrollment and the main campus or principal place of
operation of which is located in Kansas;
(4) any community college organized and operating under the
laws of this state; and
(5) Haskell Indian Nations university.
(b) Any owner or lessee of one or more passenger vehicles, trucks
registered for a gross weight of not more than 20,000 pounds or
motorcycles, who is a resident of Kansas, upon compliance with the
provisions of this section, may be issued one educational institution
license plate for each such passenger vehicle, truck or motorcycle. Such
license plates shall be issued for the same period of time as other
license plates upon proper registration and payment of the regular
license fee as provided in K.S.A. 8-143, and amendments thereto, plus
the payment of an additional fee of $5 for each plate, and either the
payment to the county treasurer of the logo use royalty payment
established by the alumni association or foundation or the presentation
of the annual emblem use authorization statement provided for in
subsection (c).
(c) Any educational institution may authorize through its officially
recognized alumni association or foundation the use of such
institution's official emblems to be affixed on license plates as provided
by this section. Any royalty payment derived from this section, except
reasonable administrative costs, shall be used for recognition of
academic achievement or excellence subject to the approval of the
chancellor or president of the educational institution. Any motor
vehicle owner or lessee may annually apply to the alumni association or
foundation for the use of the institution's emblems. Upon annual
application and payment to either: (1) The alumni association or
foundation in an amount of not less than $25 nor more than $100 as an
emblem use royalty payment for each educational institution license
plate to be issued, the alumni association or foundation shall issue to
the motor vehicle owner or lessee, without further charge, an emblem
use authorization statement, which shall be presented by the motor
vehicle owner or lessee at the time of registration; or (2) the county
treasurer of the logo use royalty payment for each license plate to be
issued.
(d) Any applicant for an educational institution license plate may
make application for such plates not less than 60 days prior to such
person's renewal of registration date, on a form prescribed and
furnished by the director of vehicles, and any applicant for the
educational institution license plates shall provide either the annual
emblem use authorization statement provided for in subsection (c) or
pay to the county treasurer the logo use royalty payment established by
the alumni association or foundation. Application for registration of a
passenger vehicle, truck or motorcycle and issuance of the license
plates under this section shall be made by the owner or lessee in a
manner prescribed by the director of vehicles upon forms furnished by
the director.
(e) No registration or educational institution license plate issued
under this section shall be transferable to any other person.
(f) The director of vehicles may transfer educational institution
license plates from a leased vehicle to a purchased vehicle.
(g) Renewals of registration under this section shall be made
SENATE BILL No. 78—page 3
annually, upon payment of the fee prescribed in subsection (b), in the
manner prescribed in K.S.A. 8-132(b), and amendments thereto. No
renewal of registration shall be made to any applicant until such
applicant provides to the county treasurer either the annual emblem use
authorization statement provided for in subsection (c) or the payment of
the annual emblem use royalty payment established by the alumni
association or foundation. If such emblem use authorization statement
is not presented at the time of registration or faxed by the alumni
association or foundations, or the annual emblem use royalty payment
is not made to the county treasurer, the applicant shall be required to
comply with K.S.A. 8-143, and amendments thereto, and return the
educational institution license plates to the county treasurer of such
person's residence.
(h) The director of vehicles shall not issue any educational
institution license plates for any educational institution, unless such
educational institution's alumni association or foundation guarantees
the initial issuance of at least 100 license plates.
(i) The director of vehicles shall discontinue the issuance of an
educational institution's license plate authorized under this section if:
(1) Fewer than 100 educational institution license plates, including
annual renewals, are issued for an educational institution by the end of
the second year of sales; and
(2) fewer than 50 educational institution license plates, including
annual renewals, are issued for an educational institution during any
subsequent two-year period.
(j) Each educational institution's alumni association or foundation
shall:
(1) Pay the initial cost of silk-screening for such educational
license plates; and
(2) provide to all county treasurers a toll-free telephone number
where applicants can call the alumni association or foundation for
information concerning the application process or the status of their
license plate application.
(k) Each educational institution's alumni association or
foundation, with the approval of the director of vehicles and subject to
the availability of materials and equipment, shall design a license plate
to be issued under the provisions of this section.
(l) As a condition of receiving the educational institution license
plate and any subsequent registration renewal of such plate, the
applicant must shall provide consent to the division authorizing the
division's release of motor vehicle record information, including the
applicant's name, address, emblem use royalty payment amount, plate
number and vehicle type to the relevant educational institution and the
state treasurer.
(m) Annual royalty payments collected by county treasurers under
this section shall be remitted to the state treasurer in accordance with
the provisions of K.S.A. 75-4215, and amendments thereto. In the case
of an educational institution that is a state educational institution as
defined by K.S.A. 76-711, 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 appropriate account of the
restricted fees fund of such state educational institution. In the case of
an educational institution which that is not a state educational
institution as defined by K.S.A. 76-711, and amendments thereto, upon
receipt of each such remittance, the state treasurer shall remit the entire
amount to the educational institutions emblem royalty fund, which is
hereby created in the state treasury and shall be administered by the
state treasurer. All expenditures from the educational institutions
emblem royalty fund shall be made in accordance with appropriation
SENATE BILL No. 78—page 4
acts upon warrants of the director of accounts and reports issued
pursuant to vouchers approved by the state treasurer or the state
treasurer's designee. Payments from the educational institutions
emblem royalty fund to the respective educational institutions shall be
made on a monthly basis.
Sec. 3. K.S.A. 13-13a46 is hereby amended to read as follows: 13-
13a46. The university shall not be eligible to receive payments of state
grants from the state general fund unless it is currently a member in
good standing of the north central association of colleges and
universities an accrediting agency or association recognized by the
United States department of education in the database maintained by
such department.
Sec. 4. K.S.A. 2024 Supp. 58-3046a is hereby amended to read as
follows: 58-3046a. (a) Except as provided in K.S.A. 58-3040, and
amendments thereto, any person who applies for an original license in
this state as a salesperson shall submit evidence, satisfactory to the
commission, of attendance of a principles of real estate course, of not
less than 30 hours of instruction, approved by the commission and
completed within the 12 months immediately preceding the receipt by
the commission of the application for salesperson's license. The
commission may require the evidence to be furnished to the
commission with the original application for license or it may require
the applicant to furnish the evidence to the testing service designated by
the commission as a prerequisite to taking the examination required by
K.S.A. 58-3039, and amendments thereto. If the evidence is furnished
to the testing service, the instruction shall have been completed within
12 months immediately preceding the date of the examination.
(b) Except as provided in K.S.A. 58-3040, and amendments
thereto, any person who applies for an original license in this state as a
broker shall submit evidence, satisfactory to the commission, of
attendance of a Kansas real estate fundamentals course, of not less than
30 and no more than 45 hours of instruction, approved by the
commission and received within the 12 months immediately preceding
the filing of application for broker's license. Such hours shall be in
addition to any hours of instruction used to meet the requirements of
subsection (c), (d), (e) or (f). The commission may require the evidence
to be furnished to the commission with the original application for
license, or it the commission may require the applicant to furnish the
evidence to the testing service designated by the commission as a
prerequisite to taking the examination provided in K.S.A. 58-3039, and
amendments thereto. If the evidence is furnished to the testing service,
the instruction shall have been completed within 12 months
immediately preceding the date of the examination.
(c) Any person who applies for an original license in this state as a
salesperson shall submit evidence, satisfactory to the commission, of
attendance of a Kansas real estate practice course, of not less than 30
hours of instruction, approved by the commission and completed within
the six months immediately preceding the receipt by the commission of
the application for licensure.
(d) Any person who applies for an original license in this state as a
broker on or after January 1, 2020, shall submit evidence, satisfactory
to the commission, of attendance of a Kansas real estate management
course, of not less than 30 and no more than 45 hours of instruction,
approved by the commission and completed within the six months
immediately preceding the receipt by the commission of the application
for licensure. The hours shall be in addition to any hours of instruction
used to meet the requirements of subsection (b), (c), (e) or (f).
(e) Any person who applies for an original license in this state as a
broker who is a nonresident of Kansas or who is a resident of Kansas
SENATE BILL No. 78—page 5
applying for licensure pursuant to K.S.A. 58-3040(e), and amendments
thereto, shall submit evidence, satisfactory to the commission, of
attendance of a Kansas real estate course, of not less than four hours of
instruction and completed within the six months immediately preceding
the filing of the application for licensure. Such course shall be
approved by the commission and shall be specific to Kansas law with
primary emphasis on issues that arise under the brokerage relationships
in real estate transactions act, K.S.A. 58-30,101 et seq., and
amendments thereto, and rules or regulations adopted thereunder.
(f) At or prior to each license expiration date established by the
commission, any person who is licensed in this state as a broker or as a
salesperson shall submit evidence, satisfactory to the commission, of
attendance of not less than 12 hours of continuing education approved
by the commission and completed after issuance of the license and
during the renewal period. This requirement shall not apply to a license
on deactivated status pursuant to K.S.A. 58-3047, and amendments
thereto.
(g) Except for courses reviewed pursuant to subsection (j), courses
of instruction required by this section shall be courses approved by the
commission and offered by:
(1) An institution which that is accredited by the north central
association of colleges and secondary schools accrediting agency an
accrediting agency or association recognized by the United States
department of education in the database maintained by such
department;
(2) a technical college as defined by K.S.A. 74-32,407, and
amendments thereto;
(3) a private or out-of-state postsecondary educational institution
which that has been issued a certificate of approval pursuant to the
Kansas private and out-of-state postsecondary educational institution
act;
(4) any agency of the state of Kansas;
(5) a similar institution, approved by the commission, in another
state; or
(6) an entity, approved by the commission, to provide continuing
education.
(h) The commission shall adopt rules and regulations to:
(1) Prescribe minimum curricula and standards for all courses
offered to fulfill education requirements of this act;
(2) designate a course of study to fulfill any specific requirement,
which may include a testing requirement;
(3) prescribe minimum qualifications for instructors of approved
courses; and
(4) establish standards and procedures for approval of courses and
instructors, monitoring courses, advertising, registration and
maintenance of records of courses, and withdrawal of approval of
courses and instructors.
(i) The commission may approve distance education courses
consisting solely or primarily of instruction provided online or in other
computer-assisted formats, or by correspondence, audiotape, videotape
or other media. For the purposes of this section, attendance of one hour
of instruction shall mean 50 minutes of classroom instruction or the
equivalent thereof in distance education study as determined by the
commission.
(j) Courses of instruction required by this section shall be courses
approved by the commission either before or after their completion.
The commission may give credit toward the 12 hours of continuing
education required by subsection (f) to any licensee who submits an
application for course review obtained from the commission and pays
SENATE BILL No. 78—page 6
the fee prescribed by K.S.A. 58-3063, and amendments thereto, if, in
the judgment of the commission, the course meets the objectives of
continuing education.
(k) The commission shall publish a list of courses approved by the
commission.
(l) No license shall be issued or renewed unless the applicable
requirements set forth in this section are met within the time prescribed.
Sec. 5. K.S.A. 74-32,120 is hereby amended to read as follows:
74-32,120. As used in this act: (a) "Kansas comprehensive grant
program" means a program under which that the state, in recognition
that the provision of higher education for all residents of the state who
have the desire and ability to obtain such education is an important
public purpose and in response to the concern that many residents of
the state are deterred by financial considerations from attending
institutions of higher education, provides assistance to students with
financial need through the award of grants.
(b) "Kansas comprehensive grant" means an award of financial
assistance under the Kansas comprehensive grant program to an
eligible Kansas student.
(c) "Financial need" means the difference between a student's
available financial resources and the student's total anticipated cost of
attendance at a certain Kansas educational institution. A student's
financial resources shall be determined on the basis of criteria provided
under the federal methodology of need analysis.
(d) "Full-time, in-state student" means a person who is a resident
of Kansas and who is enrolling or enrolled at a Kansas educational
institution for at least 12 credit hours each semester or the equivalent
thereof. The board of regents shall determine the number of hours for
terms other than semesters to constitute the equivalent of 12 credit
hours.
(e) "Kansas student" means a full-time, in-state student who has
established financial need and who is initially acceptable for entering a
Kansas educational institution or who has so entered and is in good
standing and making satisfactory progress toward graduation.
(f) "Kansas educational institution" means a state educational
institution under the control and supervision of the board of regents, a
municipal university, or a not-for-profit independent institution of
higher education which that is accredited by the north central
association of colleges and secondary schools accrediting agency based
on its requirements as of April 1, 1985, or by the higher learning
commission of the north central association of colleges and schools
based on its requirements as of January 1, 2006 an accrediting agency
or association recognized by the United States department of education
in the database maintained by such department , is operated
independently and not controlled or administered by the state or any
agency or subdivision thereof, maintains open enrollment, and the main
campus or principal place of operation of which is located in Kansas.
(g) "Open enrollment" means the policy of an institution of higher
education which that provides the opportunity of enrollment for any
student who meets its academic and other reasonable enrollment
requirements, without regard for race, gender, religion, creed or
national origin.
(h) "Board of regents" means the state board of regents provided
for in the constitution of this state and described in article 32 of chapter
74 of Kansas Statutes Annotated.
(i) "Term" means one of two or more divisions of an academic
year of a Kansas educational institution in which substantially all
courses begin and end at substantially the same time , and during which
instruction is regularly given to students.
SENATE BILL No. 78—page 7
(j) "Semester" means one of two principal terms, when there are
only two principal terms in the academic year, whether or not there are
other shorter terms during the same academic year.
Sec. 6. K.S.A. 2024 Supp. 79-3602 is hereby amended to read as
follows: 79-3602. Except as otherwise provided, as used in the Kansas
retailers' sales tax act:
(a) "Agent" means a person appointed by a seller to represent the
seller before the member states.
(b) "Agreement" means the multistate agreement entitled the
streamlined sales and use tax agreement approved by the streamlined
sales tax implementing states at Chicago, Illinois on November 12,
2002.
(c) "Alcoholic beverages" means beverages that are suitable for
human consumption and contain 0.05% or more of alcohol by volume.
(d) "Certified automated system (CAS)" means software certified
under the agreement to calculate the tax imposed by each jurisdiction
on a transaction, determine the amount of tax to remit to the appropriate
state and maintain a record of the transaction.
(e) "Certified service provider (CSP)" means an agent certified
under the agreement to perform all the seller's sales and use tax
functions, other than the seller's obligation to remit tax on its own
purchases.
(f) "Computer" means an electronic device that accepts
information in digital or similar form and manipulates it for a result
based on a sequence of instructions.
(g) "Computer software" means a set of coded instructions
designed to cause a computer or automatic data processing equipment
to perform a task.
(h) "Delivered electronically" means delivered to the purchaser by
means other than tangible storage media.
(i) "Delivery charges" means charges by the seller of personal
property or services for preparation and delivery to a location
designated by the purchaser of personal property or services including,
but not limited to, transportation, shipping, postage, handling, crating
and packing. "Delivery charges " shall does not include charges for
delivery of direct mail if the charges are separately stated on an invoice
or similar billing document given to the purchaser.
(j) "Direct mail" means printed material delivered or distributed
by United States mail or other delivery services to a mass audience or
to addressees on a mailing list provided by the purchaser or at the
direction of the purchaser when the cost of the items are not billed
directly to the recipients. "Direct mail" includes tangible personal
property supplied directly or indirectly by the purchaser to the direct
mail seller for inclusion in the package containing the printed material.
"Direct mail" does not include multiple items of printed material
delivered to a single address.
(k) "Director" means the state director of taxation.
(l) "Educational institution" means any nonprofit school, college
and university that offers education at a level above the 12 th grade, and
conducts regular classes and courses of study required for accreditation
by, or membership in , the higher learning commission an accrediting
agency or association recognized by the United States department of
education in the database maintained by such department , the state
board of education, or that otherwise qualify as an "educational
institution," as defined by K.S.A. 74-50,103, and amendments thereto.
Such phrase shall include: (1) A group of educational institutions that
operates exclusively for an educational purpose; (2) nonprofit
endowment associations and foundations organized and operated
exclusively to receive, hold, invest and administer moneys and property
SENATE BILL No. 78—page 8
as a permanent fund for the support and sole benefit of an educational
institution; (3) nonprofit trusts, foundations and other entities organized
and operated principally to hold and own receipts from intercollegiate
sporting events and to disburse such receipts, as well as grants and
gifts, in the interest of collegiate and intercollegiate athletic programs
for the support and sole benefit of an educational institution; and (4)
nonprofit trusts, foundations and other entities organized and operated
for the primary purpose of encouraging, fostering and conducting
scholarly investigations and industrial and other types of research for
the support and sole benefit of an educational institution.
(m) "Electronic" means relating to technology having electrical,
digital, magnetic, wireless, optical, electromagnetic or similar
capabilities.
(n) "Food and food ingredients" means substances, whether in
liquid, concentrated, solid, frozen, dried or dehydrated form, that are
sold for ingestion or chewing by humans and are consumed for their
taste or nutritional value. "Food and food ingredients" includes bottled
water, candy, dietary supplements, food sold through vending machines
and soft drinks. "Food and food ingredients" does not include alcoholic
beverages or tobacco.
(o) "Gross receipts" means the total selling price or the amount
received as defined in this act, in money, credits, property or other
consideration valued in money from sales at retail within this state; and
embraced within the provisions of this act. The taxpayer, may take
credit in the report of gross receipts for: (1) An amount equal to the
selling price of property returned by the purchaser when the full sale
price thereof, including the tax collected, is refunded in cash or by
credit; and (2) an amount equal to the allowance given for the trade-in
of property.
(p) "Ingredient or component part" means tangible personal
property that is necessary or essential to, and that is actually used in
and becomes an integral and material part of tangible personal property
or services produced, manufactured or compounded for sale by the
producer, manufacturer or compounder in its regular course of
business. The following items of tangible personal property are hereby
declared to be ingredients or component parts, but the listing of such
property shall not be deemed to be exclusive nor shall such listing be
construed to be a restriction upon, or an indication of, the type or types
of property to be included within the definition of "ingredient or
component part" as herein set forth:
(1) Containers, labels and shipping cases used in the distribution
of property produced, manufactured or compounded for sale that are
not to be returned to the producer, manufacturer or compounder for
reuse.
(2) Containers, labels, shipping cases, paper bags, drinking straws,
paper plates, paper cups, twine and wrapping paper used in the
distribution and sale of property taxable under the provisions of this act
by wholesalers and retailers and that is not to be returned to such
wholesaler or retailer for reuse.
(3) Seeds and seedlings for the production of plants and plant
products produced for resale.
(4) Paper and ink used in the publication of newspapers.
(5) Fertilizer used in the production of plants and plant products
produced for resale.
(6) Feed for 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
SENATE BILL No. 78—page 9
offspring for use for any such purpose or purposes.
(q) "Isolated or occasional sale" means the nonrecurring sale of
tangible personal property , or services taxable hereunder by a person
not engaged at the time of such sale in the business of selling such
property or services. Any religious organization that makes a
nonrecurring sale of tangible personal property acquired for the
purpose of resale shall be deemed to be not engaged at the time of such
sale in the business of selling such property. Such term shall include
"Isolated or occasional sale" includes: (1) Any sale by a bank, savings
and loan institution, credit union or any finance company licensed
under the provisions of the Kansas uniform consumer credit code of
tangible personal property that has been repossessed by any such entity;
and (2) any sale of tangible personal property made by an auctioneer or
agent on behalf of not more than two principals or households if such
sale is nonrecurring and any such principal or household is not engaged
at the time of such sale in the business of selling tangible personal
property.
(r) "Lease or rental" means any transfer of possession or control of
tangible personal property for a fixed or indeterminate term for
consideration. A "lease or rental" may include future options to
purchase or extend.
(1) "Lease or rental" does not include: (A) A transfer of possession
or control of property under a security agreement or deferred payment
plan that requires the transfer of title upon completion of the required
payments;
(B) a transfer or possession or control of property under an
agreement that requires the transfer of title upon completion of required
payments and payment of an option price does not exceed the greater of
$100 or 1% of the total required payments; or
(C) providing tangible personal property along with an operator
for a fixed or indeterminate period of time. A condition of this
exclusion is that the operator is necessary for the equipment to perform
as designed. For the purpose of this subsection, an operator must shall
do more than maintain, inspect or set-up the tangible personal property.
(2) "Lease or rental " does include includes agreements covering
motor vehicles and trailers where the amount of consideration may be
increased or decreased by reference to the amount realized upon sale or
disposition of the property as defined in 26 U.S.C. § 7701(h)(1).
(3) This definition shall be used for sales and use tax purposes
regardless if a transaction is characterized as a lease or rental under
generally accepted accounting principles, the internal revenue code, the
uniform commercial code, K.S.A. 84-1-101 et seq., and amendments
thereto, or other provisions of federal, state or local law.
(4) This definition will be applied only prospectively from the
effective date of this act and will have no retroactive impact on existing
leases or rentals.
(s) "Load and leave" means delivery to the purchaser by use of a
tangible storage media where the tangible storage media is not
physically transferred to the purchaser.
(t) "Member state" means a state that has entered in the agreement,
pursuant to provisions of article VIII of the agreement.
(u) "Model 1 seller" means a seller that has selected a CSP as its
agent to perform all the seller's sales and use tax functions, other than
the seller's obligation to remit tax on its own purchases.
(v) "Model 2 seller" means a seller that has selected a CAS to
perform part of its sales and use tax functions, but retains responsibility
for remitting the tax.
(w) "Model 3 seller" means a seller that has sales in at least five
member states, has total annual sales revenue of at least $500,000,000,
SENATE BILL No. 78—page 10
has a proprietary system that calculates the amount of tax due each
jurisdiction and has entered into a performance agreement with the
member states that establishes a tax performance standard for the seller.
As used in this subsection a seller includes an affiliated group of sellers
using the same proprietary system.
(x) "Municipal corporation" means any city incorporated under
the laws of Kansas.
(y) "Nonprofit blood bank" means any nonprofit place,
organization, institution or establishment that is operated wholly or in
part for the purpose of obtaining, storing, processing, preparing for
transfusing, furnishing, donating or distributing human blood or parts
or fractions of single blood units or products derived from single blood
units, whether or not any remuneration is paid therefor, or whether such
procedures are done for direct therapeutic use or for storage for future
use of such products.
(z) "Persons" means any individual, firm, copartnership, joint
adventure, association, corporation, estate or trust, receiver or trustee,
or any group or combination acting as a unit, and the plural as well as
the singular number ; and shall specifically mean . "Persons" includes
any city or other political subdivision of the state of Kansas engaging in
a business or providing a service specifically taxable under the
provisions of this act.
(aa) "Political subdivision" means any municipality, agency or
subdivision of the state that is, or shall hereafter be, authorized to levy
taxes upon tangible property within the state or that certifies a levy to a
municipality, agency or subdivision of the state that is, or shall
hereafter be, authorized to levy taxes upon tangible property within the
state. Such term also shall include "Political subdivision" includes any
public building commission, housing, airport, port, metropolitan transit
or similar authority established pursuant to law and the horsethief
reservoir benefit district established pursuant to K.S.A. 82a-2201, and
amendments thereto.
(bb) "Prescription" means an order, formula or recipe issued in
any form of oral, written, electronic or other means of transmission by
a duly licensed practitioner authorized by the laws of this state.
(cc) "Prewritten computer software" means computer software,
including prewritten upgrades, that is not designed and developed by
the author or other creator to the specifications of a specific purchaser.
The combining of two or more prewritten computer software programs
or prewritten portions thereof does not cause the combination to be
other than prewritten computer software. "Prewritten computer
software" includes software designed and developed by the author or
other creator to the specifications of a specific purchaser when it is sold
to a person other than the purchaser. Where a person modifies or
enhances computer software of which the person is not the author or
creator, the person shall be deemed to be the author or creator only of
such person's modifications or enhancements. Prewritten computer
software or a prewritten portion thereof that is modified or enhanced to
any degree, where such modification or enhancement is designed and
developed to the specifications of a specific purchaser, remains
prewritten computer software, except that where there is a reasonable,
separately stated charge or an invoice or other statement of the price
given to the purchaser for such modification or enhancement, such
modification or enhancement shall not constitute prewritten computer
software.
(dd) "Property which is consumed" means tangible personal
property that is essential or necessary to and that is used in the actual
process of and consumed, depleted or dissipated within one year in: (1)
The production, manufacture, processing, mining, drilling, refining or
SENATE BILL No. 78—page 11
compounding of tangible personal property; (2) the providing of
services; (3) the irrigation of crops, for sale in the regular course of
business; or (4) the storage or processing of grain by a public grain
warehouse or other grain storage facility, and which that is not reusable
for such purpose. The following is a listing of tangible personal
property, included by way of illustration but not of limitation, that
qualifies as property that is consumed:
(A) Insecticides, herbicides, germicides, pesticides, fungicides,
fumigants, antibiotics, biologicals, pharmaceuticals, vitamins and
chemicals for use in commercial or agricultural production, processing
or storage of fruit, vegetables, feeds, seeds, grains, animals or animal
products whether fed, injected, applied, combined with or otherwise
used;
(B) electricity, gas and water; and
(C) petroleum products, lubricants, chemicals, solvents, reagents
and catalysts.
(ee) "Purchase price" applies to the measure subject to use tax and
has the same meaning as sales price.
(ff) "Purchaser" means a person to whom a sale of personal
property is made or to whom a service is furnished.
(gg) "Quasi-municipal corporation" means any county, township,
school district, drainage district or any other governmental subdivision
in the state of Kansas having authority to receive or hold moneys or
funds.
(hh) "Registered under this agreement" means registration by a
seller with the member states under the central registration system
provided in article IV of the agreement.
(ii) "Retailer" means a seller regularly engaged in the business of
selling, leasing or renting tangible personal property at retail or
furnishing electrical energy, gas, water, services or entertainment , and
selling only to the user or consumer and not for resale.
(jj) "Retail sale" or "sale at retail" means any sale, lease or rental
for any purpose other than for resale, sublease or subrent.
(kk) "Sale" or "sales" means the exchange of tangible personal
property, as well as the sale thereof for money, and every transaction,
conditional or otherwise, for a consideration, constituting a sale,
including the sale or furnishing of electrical energy, gas, water, services
or entertainment taxable under the terms of this act and including,
except as provided in the following provision, the sale of the use of
tangible personal property by way of a lease, license to use or the rental
thereof regardless of the method by which the title, possession or right
to use the tangible personal property is transferred. The term "Sale" or
"sales" shall does not mean the sale of the use of any tangible personal
property used as a dwelling by way of a lease or rental thereof for a
term of more than 28 consecutive days.
(ll) (1) "Sales or selling price" applies to the measure subject to
sales tax and means the total amount of consideration, including cash,
credit, property and services, for which personal property or services
are sold, leased or rented, valued in money, whether received in money
or otherwise, without any deduction for the following:
(A) The seller's cost of the property sold;
(B) the cost of materials used, labor or service cost, interest,
losses, all costs of transportation to the seller, all taxes imposed on the
seller and any other expense of the seller;
(C) charges by the seller for any services necessary to complete
the sale, other than delivery and installation charges;
(D) (i) prior to July 1, 2023, delivery charges; and
(ii) on and after July 1, 2023, delivery charges that are not
separately stated on the invoice, bill of sale or similar document given
SENATE BILL No. 78—page 12
to the purchaser; and
(E) installation charges.
(2) "Sales or selling price" includes consideration received by the
seller from third parties if:
(A) The seller actually receives consideration from a party other
than the purchaser and the consideration is directly related to a price
reduction or discount on the sale;
(B) the seller has an obligation to pass the price reduction or
discount through to the purchaser;
(C) the amount of the consideration attributable to the sale is fixed
and determinable by the seller at the time of the sale of the item to the
purchaser; and
(D) one of the following criteria is met:
(i) The purchaser presents a coupon, certificate or other
documentation to the seller to claim a price reduction or discount where
the coupon, certificate or documentation is authorized, distributed or
granted by a third party with the understanding that the third party will
reimburse any seller to whom the coupon, certificate or documentation
is presented;
(ii) the purchaser identifies to the seller that the purchaser is a
member of a group or organization entitled to a price reduction or
discount. A preferred customer card that is available to any patron does
not constitute membership in such a group; or
(iii) the price reduction or discount is identified as a third party
price reduction or discount on the invoice received by the purchaser or
on a coupon, certificate or other documentation presented by the
purchaser.
(3) "Sales or selling price" shall does not include:
(A) Discounts, including cash, term or coupons that are not
reimbursed by a third party that are allowed by a seller and taken by a
purchaser on a sale;
(B) interest, financing and carrying charges from credit extended
on the sale of personal property or services, if the amount is separately
stated on the invoice, bill of sale or similar document given to the
purchaser;
(C) any taxes legally imposed directly on the consumer that are
separately stated on the invoice, bill of sale or similar document given
to the purchaser;
(D) the amount equal to the allowance given for the trade-in of
property, if separately stated on the invoice, billing or similar document
given to the purchaser;
(E) cash rebates granted by a manufacturer to a purchaser or lessee
of a new motor vehicle if paid directly to the retailer as a result of the
original sale;
(F) commencing on July 1, 2023, delivery charges that are
separately stated on the invoice, bill of sale or similar document given
to the purchaser; and
(G) notwithstanding the provisions of paragraph (2), coupons
issued by a manufacturer, supplier or distributor of a product that entitle
the purchaser to a reduction in sales price and allowed by the seller who
is reimbursed by the manufacturer, supplier or distributor. When the
seller accepts such coupons, only the amount paid by the purchaser is
included in the sales price.
(mm) "Seller" means a person making sales, leases or rentals of
personal property or services.
(nn) "Service" means those services described in and taxed under
the provisions of K.S.A. 79-3603, and amendments thereto.
(oo) "Sourcing rules" means the rules set forth in K.S.A. 79-3670
through 79-3673, 12-191 and 12-191a, and amendments thereto, that
SENATE BILL No. 78—page 13
shall apply to identify and determine the state and local taxing
jurisdiction sales or use taxes to pay, or collect and remit on a particular
retail sale.
(pp) "Tangible personal property" means personal property that
can be seen, weighed, measured, felt or touched, or that is in any other
manner perceptible to the senses. Tangible personal property includes
electricity, water, gas, steam and prewritten computer software.
(qq) "Taxpayer" means any person obligated to account to the
director for taxes collected under the terms of this act.
(rr) "Tobacco" means cigarettes, cigars, chewing or pipe tobacco
or any other item that contains tobacco.
(ss) "Entity-based exemption" means an exemption based on who
purchases the product or who sells the product. An exemption that is
available to all individuals shall not be considered an entity-based
exemption.
(tt) "Over-the-counter drug" means a drug that contains a label
that identifies the product as a drug as required by 21 C.F.R. § 201.66.
The "Over-the-counter drug" label includes: (1) A drug facts panel; or
(2) a statement of the active ingredients with a list of those ingredients
contained in the compound, substance or preparation. "Over-the-
counter drugs do drug" does not include grooming and hygiene
products such as soaps, cleaning solutions, shampoo, toothpaste,
antiperspirants and sun tan lotions and screens.
(uu) "Ancillary services" means services that are associated with
or incidental to the provision of telecommunications services,
including, but not limited to, detailed telecommunications billing,
directory assistance, vertical service and voice mail services.
(vv) "Conference bridging service" means an ancillary service that
links two or more participants of an audio or video conference call and
may include the provision of a telephone number. Conference bridging
service does not include the telecommunications services used to reach
the conference bridge.
(ww) "Detailed telecommunications billing service" means an
ancillary service of separately stating information pertaining to
individual calls on a customer's billing statement.
(xx) "Directory assistance" means an ancillary service of
providing telephone number information or address information, or
both.
(yy) "Vertical service" means an ancillary service that is offered in
connection with one or more telecommunications services, that offers
advanced calling features that allow customers to identify callers and to
manage multiple calls and call connections, including conference
bridging services.
(zz) "V oice mail service" means an ancillary service that enables
the customer to store, send or receive recorded messages. "V oice mail
service" does not include any vertical services that the customer may be
required to have in order to utilize the voice mail service.
(aaa) "Telecommunications service" means the electronic
transmission, conveyance or routing of voice, data, audio, video or any
other information or signals to a point, or between or among points.
The term "Telecommunications service" includes such transmission,
conveyance or routing in which computer processing applications are
used to act on the form, code or protocol of the content for purposes of
transmissions, conveyance or routing without regard to whether such
service is referred to as voice over internet protocol services or is
classified by the federal communications commission as enhanced or
value added. "Telecommunications service" does not include:
(1) Data processing and information services that allow data to be
generated, acquired, stored, processed or retrieved and delivered by an
SENATE BILL No. 78—page 14
electronic transmission to a purchaser where such purchaser's primary
purpose for the underlying transaction is the processed data or
information;
(2) installation or maintenance of wiring or equipment on a
customer's premises;
(3) tangible personal property;
(4) advertising, including, but not limited to, directory advertising;
(5) billing and collection services provided to third parties;
(6) internet access service;
(7) radio and television audio and video programming services,
regardless of the medium, including the furnishing of transmission,
conveyance and routing of such services by the programming service
provider. Radio and television audio and video programming services
shall include, but not be limited to, cable service as defined in 47
U.S.C. § 522(6) and audio and video programming services delivered
by commercial mobile radio service providers, as defined in 47 C.F.R.
§ 20.3;
(8) ancillary services; or
(9) digital products delivered electronically, including, but not
limited to, software, music, video, reading materials or ring tones.
(bbb) "800 service" means a telecommunications service that
allows a caller to dial a toll-free number without incurring a charge for
the call. The service is typically marketed under the name 800, 855,
866, 877 and 888 toll-free calling, and any subsequent numbers
designated by the federal communications commission.
(ccc) "900 service" means an inbound toll telecommunications
service purchased by a subscriber that allows the subscriber's customers
to call in to the subscriber's prerecorded announcement or live service.
"900 service" does not include the charge for collection services
provided by the seller of the telecommunications services to the
subscriber, or service or product sold by the subscriber to the
subscriber's customer. The service is typically marketed under the name
900 service , and any subsequent numbers designated by the federal
communications commission.
(ddd) "Value-added non-voice data service" means a service that
otherwise meets the definition of telecommunications services in which
computer processing applications are used to act on the form, content,
code or protocol of the information or data primarily for a purpose
other than transmission, conveyance or routing.
(eee) "International" means a telecommunications service that
originates or terminates in the United States and terminates or
originates outside the United States, respectively. United States
includes the District of Columbia or a U.S. territory or possession.
(fff) "Interstate" means a telecommunications service that
originates in one United States state, or a United States territory or
possession, and terminates in a different United States state or a United
States territory or possession.
(ggg) "Intrastate" means a telecommunications service that
originates in one United States state or a United States territory or
possession, and terminates in the same United States state or a United
States territory or possession.
(hhh) "Cereal malt beverage" shall have the same meaning as such
term is means the same as defined in K.S.A. 41-2701, and amendments
thereto, except that for the purposes of the Kansas retailers' sales tax act
and for no other purpose, such term shall include. "Cereal malt
beverage" includes beer containing not more than 6% alcohol by
volume when such beer is sold by a retailer licensed under the Kansas
cereal malt beverage act.
(iii) "Nonprofit integrated community care organization" means an
SENATE BILL No. 78—page 15
entity that is:
(1) Exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986;
(2) certified to participate in the medicare program as a hospice
under 42 C.F.R. § 418 et seq. and focused on providing care to the
aging and indigent population at home and through inpatient care, adult
daycare or assisted living facilities and related facilities and services
across multiple counties; and
(3) approved by the Kansas department for aging and disability
services as an organization providing services under the program of all-
inclusive care for the elderly as defined in 42 U.S.C. § 1396u-4 and
regulations implementing such section.
(jjj) (1) "Bottled water" means water that is placed in a safety
sealed container or package for human consumption. "Bottled water" is
calorie free and does not contain sweeteners or other additives, except
that it may contain:
(A) Antimicrobial agents;
(B) fluoride;
(C) carbonation;
(D) vitamins, minerals and electrolytes;
(E) oxygen;
(F) preservatives; or
(G) only those flavors, extracts or essences derived from a spice or
fruit.
(2) "Bottled water" includes water that is delivered to the buyer in
a reusable container that is not sold with the water.
(lll) (1) "Candy" means a preparation of sugar, honey or other
natural or artificial sweeteners in combination with chocolate, fruits,
nuts or other ingredients or flavorings in the form of bars, drops or
pieces.
(2) "Candy" does not include any preparation containing flour and
shall require no refrigeration.
(mmm) "Dietary supplement" means the same as defined in
K.S.A. 79-3606(jjj), and amendments thereto.
(nnn) "Food sold through vending machines" means food
dispensed from a machine or other mechanical device that accepts
payment.
(ooo) (1) "Prepared food" means:
(A) Food sold in a heated state or heated by the seller;
(B) two or more food ingredients mixed or combined by the seller
for sale as a single item; or
(C) food sold with eating utensils provided by the seller,
including, but not limited to, plates, knives, forks, spoons, glasses,
cups, napkins or straws. A plate does not include a container or
packaging used to transport the food.
(2) "Prepared food" does not include:
(A) Food that is only cut, repackaged or pasteurized by the seller;
or
(B) eggs, fish, meat, poultry or foods containing these raw animal
foods that require cooking by the consumer as recommended by the
food and drug administration in chapter 3, part 401.11 of the food and
drug administration food code so as to prevent food borne illnesses.
(ppp) (1) "Soft drinks" means nonalcoholic beverages that contain
natural or artificial sweeteners.
(2) "Soft drinks" does not include beverages that contain milk or
milk products, soy, rice or similar milk substitutes or beverages that are
greater than 50% vegetable or fruit juice by volume.
Sec. 7. K.S.A. 8-1,142, 13-13a46 and 74-32,120 and K.S.A. 2024
Supp. 58-3046a and 79-3602 are hereby repealed.
SENATE BILL No. 78—page 16
Sec. 8. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE concurred in
HOUSE amendments _______________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.
Passed the HOUSE
as amended _________________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.