Session Law

Identifying Information:L. 2003 ch. 159
Other Identifying Information:2003 House Bill 2416
Tax Type:All
Brief Description:An Act concerning taxation; relating to amnesty from assessment or payment of penalties and interest on certain unpaid taxes; procedures and requirements of program; definition of doing business in state for sales and compensating tax purposes; amending K.S.A. 79- 3702 and repealing the existing section.
Keywords:


Body:

CHAPTER 159

HOUSE BILL No. 2416


An Act concerning taxation; relating to amnesty from assessment or payment of penalties

and interest on certain unpaid taxes; procedures and requirements of program; definition

of doing business in state for sales and compensating tax purposes; amending K.S.A. 79-


3702 and repealing the existing section.


Be it enacted by the Legislature of the State of Kansas:

New Section 1. (a) (1) Notwithstanding the provisions of any other

law to the contrary, with respect to the following taxes administered by

the department of revenue, an amnesty from the assessment or payment

of all penalties and interest with respect to unpaid taxes or taxes due and

owing shall apply upon compliance with the provisions of this section and

if such tax liability is paid in full within the amnesty period, from October

1, 2003, to November 30, 2003: (A) Privilege tax under K.S.A. 79-1106

et seq. and amendments thereto; (B) taxes under the Kansas estate tax

act, K.S.A. 2002 Supp. 79-15,100 et seq. and amendments thereto; (C)

taxes under the Kansas income tax act, K.S.A. 79-3201 et seq. and amend-

ments thereto; (D) taxes under the Kansas withholding and declaration

of estimated tax act, K.S.A. 79-3294 et seq. and amendments thereto; (E)

taxes under the Kansas cigarette and tobacco products act, K.S.A. 79-

3301 et seq. and amendments thereto; (F) taxes under the Kansas retail-

ers' sales tax act, K.S.A. 79-3601 et seq. and amendments thereto and the

Kansas compensating tax act, K.S.A. 79-3701 et seq. and amendments

thereto; (G) local sales and use taxes under K.S.A. 12-187 et seq. and

amendments thereto; (H) liquor enforcement tax under K.S.A. 79-4101

et seq. and amendments thereto; (I) liquor drink tax under K.S.A. 79-

41a01 et seq. and amendments thereto; and (J) mineral severance tax

under K.S.A. 79-4216 et seq. and amendments thereto.

(2) Except for the Kansas privilege tax and individual and corporate

income tax, amnesty shall apply only to tax liabilities due and unpaid for

tax periods ending on or before December 31, 2002. For the Kansas

privilege tax and individual and corporate income tax, amnesty shall apply

only to tax liabilities due and unpaid for tax periods ending on or before

December 31, 2001. For the eligible taxes and tax periods, amnesty shall

apply to the under-reporting of such tax liabilities, the nonpayment of

such taxes and the nonreporting of such tax liabilities.

(3) Amnesty shall not apply to any matter or matters for which, on or

after February 6, 2003, any one of the following circumstances exist: (A)

The taxpayer has received notice of the commencement of an audit; (B)

an audit is in progress; (C) the taxpayer has received notice of an assess-

ment pursuant to K.S.A. 79-2971 or 79-3643 and amendments thereto;

(D) as a result of an audit, the taxpayer has received notice of a proposed

or estimated assessment or notice of an assessment; (E) the time to ad-

ministratively appeal an issued assessment has not yet expired; or (F) an

assessment resulting from an audit, or any portion of such assessment, is

pending in the administrative appeals process before the secretary or

secretary's designee pursuant to K.S.A. 79-3226 or 79-3610 and amend-

ments thereto or the board of tax appeals, or is pending in the judicial

review process before any state or federal district or appellate court. Am-

nesty shall not apply to any matter that is the subject of an assessment,

or any portion of an assessment, which has been affirmed by a reviewing

state or federal district or appellate court. Amnesty shall not apply to any

party to any criminal investigation or to any civil or criminal litigation that

is pending in any court of the United States or this state for nonpayment,

delinquency or fraud in relation to any tax imposed by the state of Kansas.

(b) Upon written application by the taxpayer, on forms prescribed by

the secretary of revenue, and upon compliance with the provisions of this

section, the department of revenue shall not seek to collect any penalty

or interest which may be applicable with respect to taxes eligible for

amnesty.

(c) Amnesty for penalties and interest shall be granted only to those

eligible taxpayers who, within the amnesty period of October 1, 2003, to

November 30, 2003, and in accordance with rules and regulations estab-

lished by the secretary of revenue, have properly filed a tax return for

each taxable period for which amnesty is requested, paid the entire bal-

ance of tax due and obtained approval of such amnesty by the department

of revenue.

(d) If a taxpayer elects to participate in the amnesty program estab-

lished pursuant to this section as evidenced by full payment of the tax

due as established by the secretary of revenue, that election shall consti-

tute an express and absolute relinquishment of all administrative and ju-

dicial rights of appeal with respect to such tax liability. No tax payment

received pursuant to this section shall be eligible for refund or credit. No

payment of penalties or interest made prior to October 1, 2003, shall be

eligible for amnesty.

(e) For tax returns for which amnesty has been requested, nothing

in this section shall be interpreted to prohibit the department from ad-

justing such tax return as a result of a federal, department or other state

agency audit.

(f) Fraud or intentional misrepresentation of a material fact in con-

nection with an application for amnesty shall void such application and

any waiver of penalties and interest from amnesty.

(g) Discovery of fraud relating to the underlying tax liability shall void

the abatement of any liability as a result of any amnesty.

(h) The department may promulgate such rules and regulations or

issue administrative guidelines as are necessary to administer the provi-

sions of this section.

Sec. 2. K.S.A. 79-3702 is hereby amended to read as follows: 79-

3702. For the purposes of this act: (a) ``Purchase price'' means the con-

sideration paid or given or contracted to be paid or given by any person

to the seller of an article of tangible personal property for the article

purchased. The term shall include, in addition to the consideration paid

or given or contracted to be paid or given, the actual cost of transportation

from the place where the article was purchased to the person using the

same in this state. If a cash discount is allowed and taken on the sale it

shall be deducted in arriving at the purchase price.

(b) The meaning ascribed to words and phrases in K.S.A. 79-3602,

and amendments thereto, insofar as is practicable, shall be applicable

herein unless otherwise provided. The provisions of K.S.A. 79-3601 to

79-3625, inclusive, and amendments thereto, relating to enforcement,

collection and administration, insofar as practicable, shall have full force

and effect with respect to taxes imposed under the provisions of this act.

(c) ``Use'' means the exercise within this state by any person of any

right or power over tangible personal property incident to the ownership

of that property, except that it shall not include processing, or the sale of

the property in the regular course of business, and except storage as

hereinafter defined.

(d) ``Storage'' means any keeping or retaining in this state for any

purpose except sale in the regular course of business or subsequent use

solely outside this state of tangible personal property purchased from a

retailer.

(e) ``Storage'' and ``use'' do not include the keeping, retaining or ex-

ercising of any right or power over tangible personal property shipped or

brought into this state for the purpose of subsequently transporting it

outside the state for use thereafter solely outside the state, or for the

purpose of being processed, fabricated, or manufactured into, attached

to or incorporated into, other tangible personal property to be transported

outside the state and thereafter used solely outside the state.

(f) ``Property used in processing'' means: (1) Any tangible personal

property which, when used in fabrication, compounding, manufacturing

or germination, becomes an integral part of the new article resulting from

such fabrication, compounding, manufacturing, or germination, and in-

tended to be sold ultimately at retail; (2) fuel which is consumed in cre-

ating power, heat, or steam for processing or for generating electric cur-

rent.

(g) ``Retailer'' means every person engaged in the business of selling

tangible personal property for use within the meaning of this act, except

that, when in the opinion of the director it is necessary for the efficient

administration of this act to regard any salesperson, representatives,

truckers, peddlers or canvassers as the agents of the dealers, distributors,

supervisors, employers or persons under whom they operate or from

whom they obtain the tangible personal property sold by them, irrespec-

tive of whether they are making sales on their own behalf or on behalf of

such dealers, distributors, supervisors, employers, or persons, the director

may so regard them and may regard the dealers, distributors, supervisors,

employers, or persons as retailers for the purposes of this act.

(h) (1) ``Retailer doing business in this state'' or any like term, means:

(A) Any retailer: (1) having or maintaining within in this state, perma-

nently, temporarily, directly or by indirectly through a subsidiary, agent

or representative, an office, distribution house, sales house, warehouse or

other place of business, or any agent or other representative operating

within this state under the authority of the retailer or its subsidiary, ir-

respective of whether such place of business or agent is located here

permanently or temporarily, or whether such retailer or subsidiary is ad-

mitted to do business within the state; (2) engaging in regular or system-

atic solicitation of sales of tangible personal property in this state by the

distribution of catalogs, periodicals, advertising flyers, or other advertis-

ing, by means of print, radio or television media, or by mail, telegraphy,

telephone, computer data base, cable, optic, microwave or other com-

munication system for the purpose of effecting retail sales of tangible

personal property.;

(B) any retailer having an employee, independent contractor, agent,

representative, salesperson, canvasser or solicitor operating in this state

either permanently or temporarily, under the authority of the retailer or

its subsidiary, for the purpose of selling, delivering, installing, assembling,

servicing, repairing, soliciting sales or the taking of orders for tangible

personal property;

(C) any retailer, including a contractor, repair person or other service

provider, who enters this state to perform services that are enumerated

in K.S.A. 79-3603 and amendments thereto, and who is required to secure

a retailer's sales tax registration certificate before performing those serv-

ices;

(D) any retailer deriving rental receipts from a lease of tangible per-

sonal property situated in this state;

(E) any person having a franchisee or licensee operating under its

trade name if the franchisee or the licensee is required to collect the tax

under the Kansas retailers' sales tax act;

(F) any person regularly maintaining a stock of tangible personal

property in this state for sale in the normal course of business; and

(G) any retailer who has any other contact with this state that would

allow this state to require the retailer to collect and remit tax under the

provisions of the constitution and laws of the United States.

(2) A retailer shall be presumed to be doing business in this state if:

(A) Both of the following conditions exist:

(i) The retailer holds a substantial ownership interest in, or is owned

in whole substantial part by, a retailer maintaining a sales location in

Kansas; and

(ii) the retailer sells the same or a substantially similar line of products

as the related Kansas retailer and does so under the same or a substantially

similar business name, or the Kansas facilities or Kansas employees of the

related Kansas retailer are used to advertise, promote or facilitate sales

by the retailer to consumers.

(B) The retailer holds a substantial ownership interest in, or is owned

in whole or in substantial part by, a business that maintains a distribution

house, sales house, warehouse or similar place of business in Kansas that

delivers property sold by the retailer to consumers.

(C) For purposes of paragraphs (A) and (B):

(i) ``Substantial ownership interest'' means an interest in an entity

that is not less than the degree of ownership of equity interest in an entity

that is specified by Section 78p of Title 15 of the United States Code, or

any successor to that statute, with respect to a person other than a director

or officer; and

(ii) ``ownership'' means and includes both direct ownership, and in-

direct ownership though a parent, subsidiary or affiliate.

(3) The processing of orders electronically, by fax, telephone, the in-

ternet or other electronic ordering process, does not relieve a retailer of

responsibility for collection of the tax from the purchaser if the retailer is

doing business in this state pursuant to this section.

(i) ``Director'' means the director of taxation.

New Sec. 3. When tangible personal property is delivered by an

owner or former owner thereof, or by a factor, or agent of that owner,

former owner or factor to a consumer, pursuant to a retail sale made by

a retailer who has not been issued a registration certificate pursuant to

K.S.A. 79-3608 and amendments thereto, or a permit issued pursuant to

K.S.A. 79-3705d and amendments thereto, the person making the deliv-

ery shall be deemed the retailer of that property. Such person shall in-

clude the retail selling price of the property in such person's gross re-

ceipts. As used in this section, ``factor'' means either an agent who is

employed to sell property for the principal and who is vested with pos-

session or control of the property or a person who receives and sells goods

for a commission. This section shall be part of and supplemental to the

Kansas retailers' sales tax act.

Sec. 4. K.S.A. 79-3702 is hereby repealed.

Sec. 5. This act shall take effect and be in force from and after its

publication in the statute book.

Approved May 23, 2002.


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Date Composed: 10/29/2003 Date Modified: 10/29/2003