Providing a sales tax exemption for the construction or remodeling of a qualified data center in Kansas and the purchase of data center equipment, eligible data center costs and certain labor costs to qualified firms that commit to a minimum investment of at least $250,000,000 and meet new Kansas jobs and other requirements.

SENATE BILL No. 98
AN ACT concerning data centers; relating to economic development; providing a sales tax
exemption for the construction or remodeling of a qualified data center in Kansas, the
purchase of data center equipment, eligible data center costs and certain labor costs to
qualified firms that commit to a minimum investment of $250,000,000 and meet new
Kansas jobs and other requirements; prohibiting public utilities from authorizing
discounted economic development electric rates for customers that construct new or
expanded facilities that are data centers; requiring qualified data centers to be
reviewed and approved by the Kansas intelligence fusion center prior to awarding
public financial assistance or benefits; amending K.S.A. 2024 Supp. 66-101j and 79-
3606 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. For purposes of sections 1 through 3, and
amendments thereto:
(a) "Commencement of construction" means the date that
construction, reconstruction, enlargement or remodeling of a qualified
data center by a qualified firm commences, as determined in the
agreement required by section 2, and amendments thereto.
(b) "Commencement of operations" means the date that the
qualified firm commences operations at a qualified data center, as
determined in the agreement required by section 2, and amendments
thereto.
(c) "Data center equipment" means equipment or software
purchased or leased for the processing, storage, retrieval or
communication of data, regardless of whether the property is or is not
affixed to or incorporated into real property, including the following:
(1) Servers, routers and connections and computer equipment,
monitoring and security equipment or systems;
(2) equipment used in the operation of the qualified data center,
including, but not limited to, backup generators, component parts,
installations, refreshments, replacements and upgrades;
(3) all equipment necessary to cool and maintain a controlled
environment for the operation of the computer servers and other
components of the qualified data center, including, but not limited to,
chillers, mechanical equipment, refrigerant piping, fuel piping and
storage, adiabatic and free cooling systems, cooling towers, water
softeners, air handling units, indoor direct exchange units, fans, ducting
and filters;
(4) all water conservation systems, including facilities or
mechanisms that are designed to collect, conserve and reuse water;
(5) all computer server equipment, chassis, networking equipment,
switches, racks, fiber optic and copper cabling, trays and conduit;
(6) all conduit, ducting and fiber optic and copper cabling directly
related to connecting one or more distributed qualified data center
locations regardless of whether located inside or outside a data center;
(7) all software; and
(8) other personal property that is essential to the operations of a
qualified data center, excluding such property used in the
administration of the qualified data center.
(d) "Department" means the department of commerce.
(e) (1) "Eligible data center costs" means expenditures for the
development, acquisition, construction and operation of a qualified data
center by a qualified firm, including, but not limited to, costs of land,
buildings, site improvements, data center equipment, data center
equipment acquisition and permitting, lease payments, site
characterization and assessment, engineering and design used directly
and exclusively for a qualified data center.
(2) "Eligible data center costs" does not include the cost of
electricity.
(f) "New jobs" means newly created jobs with a qualified firm at a
qualified data center or directly associated with a qualified data center
SENATE BILL No. 98—page 2
filled by Kansas residents and the primary work locations of such jobs
are in Kansas.
(g) "Qualified data center" means one or more buildings that are
constructed, reconstructed, enlarged , remodeled or leased to house a
group of networked computer servers in this state to centralize the
storage, management and dissemination of data and information
pertaining to a particular business, taxonomy or body of knowledge and
such buildings are connected to each other by fiber and associated
equipment required for operating a fiber transmission network between
data center buildings and internet points for the purpose of providing
redundancy and resiliency for the data center services provided in each
building.
(h) "Qualified firm" means a business or an affiliate thereof that is
registered with the secretary of state and is engaged in the
development, operation or leasing of a qualified data center. "Qualified
firm" does not include a telecommunications carrier or local exchange
carrier as defined in K.S.A. 66-1,187, and amendments thereto, electing
carrier as defined in K.S.A. 66-2005(x), and amendments thereto,
wireless services provider as defined in K.S.A. 66-2019, and
amendments thereto, or video service provider as defined in K.S.A. 12-
2022, and amendments thereto.
(i) "Secretary" means the secretary of commerce.
New Sec. 2. (a) A qualified firm that makes an investment in
eligible data center costs in a qualified data center of at least
$250,000,000 in the aggregate by the fifth year of operations and
creates and maintains at least 20 new jobs at the qualified data center
within two calendar years after the commencement of operations shall
receive a sales tax exemption, as provided by K.S.A. 79-3606(xxxx),
and amendments thereto, and section 3, and amendments thereto, for:
(1) Eligible data center costs of the qualified data center; and
(2) labor services to install, apply, repair, service, alter or maintain
data center equipment.
(b) To be eligible to receive such sales tax exemption, a qualified
firm shall:
(1) Submit an application to the secretary in the form and manner
as required by the secretary;
(2) commit to an investment in eligible data center costs of at least
$250,000,000 in the qualified data center, to be completed by the fifth
year of operations or on such earlier date as specified in the agreement
pursuant to paragraph (6);
(3) commit to begin construction of the project within 10 years of
the date of the agreement with the secretary or on such earlier date as
specified in the agreement pursuant to paragraph (6);
(4) commit to purchase electricity for 10 years from the public
utility that is certified to provide retail electric service in the territory
where the qualified data center is located;
(5) commit to undertake practices that will conserve, reuse and
replace water, including, but not limited to:
(A) Using water efficient fixtures and practices;
(B) treating, infiltrating and harvesting rainwater;
(C) recirculating and recycling water before discharging;
(D) partnering with state and local governmental entities and
private individuals and entities to use discharged water for irrigation,
water conservation or other beneficial purposes;
(E) using reclaimed water when possible; and
(F) supporting water restoration efforts in local watersheds; and
(6) if the application is approved by the secretary, enter into an
agreement with the secretary upon such terms and conditions as the
secretary may require, including the commitments or conditions
SENATE BILL No. 98—page 3
required by paragraphs (2) through (5) and subsections (c) and (d)(1)
and (2). The agreement shall be entered into before any sales tax
exemption may be provided under this act.
(c) If it is determined by the secretary that the qualified firm has
breached a term or condition of the agreement, the secretary shall
provide written notice to the qualified firm as to which terms or
conditions were breached and allow the qualified firm 120 days to cure
the breached terms or conditions. If the breached terms or conditions
have not been cured within such time, the secretary may require the
qualified firm to repay all or a part of the amount of the sales tax
exemption received, terminate the sales tax exemption or suspend all or
a part of the sales tax exemption until the breach is cured.
(d) As a condition of receiving the sales tax exemption, a qualified
firm shall agree to:
(1) Cooperate with audits undertaken by the secretary of revenue
as provided by subsection (f); and
(2) provide the secretary of commerce information required:
(A) For publication in the economic development incentive
program information database pursuant to K.S.A. 74-50,226, and
amendments thereto;
(B) for the secretary's report pursuant to K.S.A. 74-50,320, and
amendments thereto; and
(C) by the secretary of commerce or the secretary of revenue
pursuant to subsection (e)(1).
(e) (1) Every five years, the secretary may conduct a review of the
activities undertaken by a qualified firm to ensure that the qualified
firm remains in good standing with the state, is in compliance with the
provisions of this act, any rules and regulations adopted by the
secretary with respect to this act and any agreement entered into
pursuant to this section and continues to meet the requirements for the
sales tax exemption provided under this act. The secretary of commerce
shall certify every five years to the secretary of revenue whether the
qualified firm meets the criteria for designation as a qualified firm and
is eligible for such sales tax exemption. The qualified firm shall
provide the secretary of commerce all information reasonably
necessary to determine such eligibility. Except as provided by
paragraph (2), information obtained under this paragraph shall not be
subject to disclosure pursuant to K.S.A. 45-215 et seq., and
amendments thereto, unless such information is subject to disclosure
pursuant to subsection (d)(1) or (2), but shall, upon request, be made
available to the legislative post audit division. The provisions of this
paragraph providing for confidentiality of records shall expire on July
1, 2030, unless the legislature reviews and acts to continue such
provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to
July 1, 2030.
(2) If, in the judgment of the secretary, any confidential
information, trade secret or other information obtained under this
section would place the qualified firm at a disadvantage in the
marketplace or would significantly interfere with the purposes of this
act, if known, shall not be subject to disclosure pursuant to K.S.A. 45-
215 et seq., and amendments thereto, but shall, upon request, be made
available to the legislative post audit division. The provisions of this
paragraph providing for confidentiality of records shall expire on July
1, 2030, unless the legislature reviews and acts to continue such
provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to
July 1, 2030.
(f) The books and 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
SENATE BILL No. 98—page 4
employees during business hours on at least 60 days' prior written
notice. The secretary may request the department of revenue to audit
the qualified firm, or a third party if applicable, for compliance with the
provisions of this act.
(g) The secretary of commerce shall certify to the secretary of
revenue when the qualified firm has met the conditions to receive a
sales tax exemption as provided by section s 3 and 4, and amendments
thereto, and shall provide notice when the sales tax exemption is
modified, suspended or terminated pursuant to subsection (c).
(h) The secretary of commerce or the secretary of revenue may
adopt rules and regulations for the implementation of this act.
New Sec. 3. (a) On and after July 1, 2025, a qualified firm that
meets the requirements of section 2, and amendments thereto, may be
eligible for a sales tax exemption as provided by this section and the
provisions of K.S.A. 79-3606(xxxx), and amendments thereto.
(b) The sales tax exemption shall be valid for 20 years after the
date of commencement of operations.
(c) No sales tax exemption shall be approved by the secretary of
revenue unless the qualified firm has been certified by the secretary of
commerce, as provided in section 2, and amendments thereto, as
meeting all requirements of this act, the rules and regulations of the
secretary, if any, and the agreement executed pursuant to section 2, and
amendments thereto.
(d) A sales tax exemption shall be revoked, suspended or modified
by the secretary of revenue as requested by the secretary of commerce
upon notification by the secretary of commerce as provided by section
2(c) and (g), and amendments thereto.
New Sec. 4. (a) Prior to awarding any public financial assistance
or benefits to a qualified data center project, including, but not limited
to, the sales tax exemption established pursuant to K.S.A. 79-
3606(xxxx), and amendments thereto, and sections 1 through 3, and
amendments thereto, the secretary of commerce shall seek and receive
approval from the fusion center oversight board established pursuant to
K.S.A. 48-3705, and amendments thereto.
(b) Upon receipt of an application from the secretary of
commerce, the Kansas intelligence fusion center shall evaluate the
equipment and associated software of the qualified data center for
potential security threats to critical infrastructure and advise the fusion
center oversight board of any risks associated with such equipment and
associated software.
(c) The fusion center oversight board may approve the project,
recommend or require changes to protect critical infrastructure or deny
such project if the qualified data center, as configured, would pose a
threat to the critical infrastructure of the state of Kansas.
(d) As used in this section, "qualified data center" means the same
as defined in section 1, and amendments thereto.
Sec. 5. K.S.A. 2024 Supp. 66-101j is hereby amended to read as
follows: 66-101j. (a) Notwithstanding the provisions of K.S.A. 66-101b
or 66-109, and amendments thereto, the commission shall authorize an
electric public utility to implement economic development rate
schedules that provide discounts from otherwise applicable standard
rates for electric service for new or expanded facilities of industrial or
commercial customers that are not in the business of selling or
providing goods or services directly to the general public. To be eligible
for such discounts, such customer shall:
(1) Have incentives from one or more local, regional, state or
federal economic development agencies to locate such new or
expanded facilities in the electric public utility's certified service
territory;
SENATE BILL No. 98—page 5
(2) qualify for service under the electric public utility's non-
residential and non-lighting rate schedules for such new or expanded
facility; and
(3) not receive the discount together with service provided by the
electric public utility pursuant to any other special contract agreements.
(b) The discount authorized by this section shall only be
applicable to new facilities or expanded facilities that have:
(1) A peak demand that is reasonably projected to be at least 200
kilowatts within two years of the date the customer first receives
service under the discounted rate and is not the result of shifting
existing demand from other facilities of the customer in the electric
public utility's certified service territory and:
(A) Has an annual load factor that is reasonably projected to equal
or exceed the electric public utility's annual system load factor within
two years of the date the customer first receives service under the
discounted rate; or
(B) otherwise warrants a discounted rate based on any of the
following factors:
(i) The number of new permanent full-time jobs created or the
percentage increase in existing permanent full-time jobs created;
(ii) the level of capital investment;
(iii) additional off-peak usage;
(iv) curtailable or interruptible load;
(v) new industry or technology; or
(vi) competition with existing industrial customers;
(2) a peak demand that is reasonably projected to be at least 300
kilowatts within two years of the date the customer first receives
service under the discounted rate and is not the result of shifting
existing demand from other facilities of the customer in the electric
public utility's certified service territory and:
(A) An annual load factor that is reasonably projected to be at
least 55% within two years of the date the customer first receives
service under the discounted rate; and
(B) the facility shall, once first achieved, maintain the peak
demand and load factor for the remaining duration of the discounted
rate; or
(3) a peak demand that is reasonably projected to be at least 25
megawatts within two years of the date the customer first receives
service under the discounted rate and is not the result of shifting
existing demand from other facilities of the customer in the electric
public utility's certified service territory and:
(A) An annual load factor that is reasonably projected to be at
least 55% within two years of the date the customer first receives
service under the discounted rate; and
(B) the facility shall, once first achieved, maintain the peak
demand and load factor for the remaining duration of the discounted
rate.
(c) A customer shall not be eligible for the discount authorized by
this section for any new or expanded facility that is a qualified data
center as defined in section 1, and amendments thereto.
(d) The discount authorized by this section shall be determined by
reducing otherwise applicable charges associated with the rate schedule
applicable to the new or expanded existing facility by a fixed
percentage for each year of service under the discount for a period of
up to:
(1) Five years to facilities that qualify pursuant to subsection (b)
(1) or (b)(2); and
(2) 10 years to facilities that qualify pursuant to subsection (b)(3).
(d)(e) (1) For discounts to facilities that qualify pursuant to
SENATE BILL No. 98—page 6
subsection (b)(1), the average of the annual discount percentages shall
not exceed 20%, except that such discounts may be between 5% to 30%
in any year of such five-year period.
(2) For discounts to facilities that qualify pursuant to subsection
(b)(2), the average of the annual discount percentages shall not exceed
40%, except that such discounts may be between 20% and 50% in any
year of such five-year period.
(3) For discounts to facilities that qualify pursuant to subsection
(b)(3), the average of the annual discount percentages shall not exceed:
(A) For the first five years of the discount period, 40%, except that
such discounts may be between 20% to 50% in any year of such five-
year period; and
(B) for the final five years of the discount period, 20%, except that
such discounts may be between 10% and 30% in any year of such five-
year period.
(e)(f) (1) Except as provided in paragraph (2), on and after July 1,
2024, the difference in revenues generated by applying the discounted
rates authorized pursuant to this section and the revenues that would
have been generated without such discounts shall not be imputed into
the electric public utility's revenue requirement.
(2) Any reduction in revenue resulting from any discount provided
pursuant to this section that was tracked by the public utility and
deferred to a regulatory asset prior to July 1, 2024, shall be recoverable
in any general rate proceeding initiated on or after July 1, 2024,
through an equal percentage adjustment to the revenue requirement
responsibility for all customer classes of the public utility, including the
customer classes that include customers qualifying for discounts
pursuant to this section.
(f)(g) The provisions of this section shall not apply to rates for
service provided to customers under contract rates approved by the
commission pursuant to K.S.A. 2024 Supp. 66-101i, and amendments
thereto, or the commission's general ratemaking authority according to
custom and practice of the commission in place prior to the effective
date of this section.
(g)(h) Starting in January 2023, the commission shall biennially
provide a status report to the legislature about any discounts from
tariffed rates authorized pursuant to this section. Such report shall
include the:
(1) Number of entities with such discounts;
(2) number of entities with increased load;
(3) number of entities with decreased load;
(4) aggregate load and change in aggregate load on an annual
basis;
(5) total subsidy and the subsidy for each individual contract;
(6) annual and cumulative rate impact on non-contract rate
customers; and
(7) estimated economic development impact of entities with
discounted rates that occurred as a result of such discounts through an
evaluation of the annual: (A) Total employment for such entities; (B)
change in employment for such entities; and (C) tax revenue generated
by such entities.
(h)(i) An electric public utility shall be authorized to only
implement discounted rates for facilities that qualify for such
discounted rates pursuant to subsection (b)(3) until December 31, 2030,
except that, upon application by such public utility, the commission
may authorize the public utility to continue to implement such
discounted rates for facilities that qualify for such discounted rates
pursuant to subsection (b)(3) until December 31, 2036. Any such
application shall be filed with the commission on or before December
SENATE BILL No. 98—page 7
31, 2028. The commission shall issue a determination on an application
filed pursuant to this subsection within 240 days of the date that such
application is filed. If requested by the public utility, an intervenor in
the application docket or commission staff, the commission shall hold a
hearing on such application. When considering and making a
determination upon such application, the commission may consider
factors that the commission deems just and reasonable and condition
the commission's determination on any factors that are relevant to the
discounted rates for facilities that qualify for such discounted rates
pursuant to subsection (b)(3). If the commission denies the public
utility's application, such denial shall only act to prohibit the public
utility from implementing discounted rates for facilities that qualify for
such discounted rates pursuant to subsection (b)(3) after December 31,
2030, and shall not otherwise affect or terminate any discounted rates
implemented by the public utility pursuant to this section or any
regulatory or ratemaking treatment of such discounted rates.
(i)(j) For the purposes of this section:
(1) "Electric public utility" means the same as defined in K.S.A.
66-101a, and amendments thereto, but does not include any such utility
that is a cooperative as defined in K.S.A. 66-104d, and amendments
thereto, or owned by one or more such cooperatives;
(2) "expanded facility" means a separately metered facility of the
customer, unless the utility determines that the additional costs of
separate metering of such facility would exceed the associated benefits
or that it would be difficult or impractical to install or read the meter,
that has not received service in the electric utility's certified service
territory in the previous 12 months; and
(3) "new facility" means a building of the customer that has not
received electric service in the electric utility's certified service territory
in the previous 12 months.
Sec. 6. 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
SENATE BILL No. 98—page 8
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 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 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,
SENATE BILL No. 98—page 9
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 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
SENATE BILL No. 98—page 10
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, 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
SENATE BILL No. 98—page 11
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 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
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"
SENATE BILL No. 98—page 12
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
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
SENATE BILL No. 98—page 13
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 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
SENATE BILL No. 98—page 14
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;
(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 operations engaged in at a manufacturing or processing plant or
facility to process, transform or convert tangible personal property by
SENATE BILL No. 98—page 15
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 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
SENATE BILL No. 98—page 16
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
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
SENATE BILL No. 98—page 17
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 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.
(7) The secretary of revenue shall adopt rules and regulations
necessary to administer the provisions of this subsection;
SENATE BILL No. 98—page 18
(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 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;
SENATE BILL No. 98—page 19
(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 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
SENATE BILL No. 98—page 20
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 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
SENATE BILL No. 98—page 21
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
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 whom such purchases are made,
and such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project the
contractor shall furnish to such organization concerned a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection.
All invoices shall be held by the contractor for a period of five years
and shall be subject to audit by the director of taxation. If any materials
purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been
returned for credit or the sales or compensating tax otherwise imposed
upon such materials that will not be so incorporated in the building or
other project reported and paid by such contractor to the director of
taxation not later than the 20 th day of the month following the close of
SENATE BILL No. 98—page 22
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 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.
SENATE BILL No. 98—page 23
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 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
SENATE BILL No. 98—page 24
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
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 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
SENATE BILL No. 98—page 25
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;
(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
SENATE BILL No. 98—page 26
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 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
SENATE BILL No. 98—page 27
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 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, 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
SENATE BILL No. 98—page 28
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 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
SENATE BILL No. 98—page 29
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
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
SENATE BILL No. 98—page 30
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 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 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
SENATE BILL No. 98—page 31
incorporated in the building or other project or not to have been
returned for credit or the sales or compensating tax otherwise imposed
upon such materials that will not be incorporated into the building or
other project reported and paid by such contractor to the director of
taxation not later than the 20 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
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 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
SENATE BILL No. 98—page 32
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 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
SENATE BILL No. 98—page 33
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 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;
(jjjj) all sales of tangible personal property or services purchased
SENATE BILL No. 98—page 34
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 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,
SENATE BILL No. 98—page 35
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. 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
SENATE BILL No. 98—page 36
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
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
SENATE BILL No. 98—page 37
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 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 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
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. 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
SENATE BILL No. 98—page 38
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
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.
SENATE BILL No. 98—page 39
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 20 th 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 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
SENATE BILL No. 98—page 40
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 data center by a
qualified firm that meets the requirements established in sections 1
through 3, and amendments thereto, and has been approved and
certified for a project exemption certificate by the secretary of
commerce, the sale and installation of machinery and data center
equipment and eligible data center costs purchased by such qualified
firm for such qualified data center and labor services to install, apply,
repair, service, alter or maintain data center equipment of such
qualified firm at such qualified data center. When a person contracts
for the construction, reconstruction, enlargement or remodeling of any
such qualified data center, 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 certificates. Upon
completion of the project, the contractor shall furnish to the owner of
the qualified firm 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
thereof, shall be subject to the penalties provided for in K.S.A. 79-
3615(h), and amendments thereto. As used in this subsection, "data
center equipment," "eligible data center costs," "qualified data center"
and "qualified firm" mean the same as defined in section 1, and
amendments thereto.
Sec. 7. K.S.A. 2024 Supp. 66-101j and 79-3606 are hereby
repealed.
SENATE BILL No. 98—page 41
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 adopted
Conference Committee Report ________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.

Passed the HOUSE
as amended _________________________
HOUSE adopted
Conference Committee Report ________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.