Session Law

Identifying Information:L. 2001 ch. 096
Other Identifying Information:2001 Senate Bill 1
Tax Type:Kansas Retailers' Sales Tax
Brief Description:An Act relating to sales taxation; concerning the taxation of certain services provided by telecommunications companies; amending K.S.A. 2000 Supp. 79-3603 and repealing the existing section.
Keywords:


Body:

CHAPTER 96

SENATE BILL No. 1


An Act relating to sales taxation; concerning the taxation of certain services provided by

telecommunications companies; amending K.S.A. 2000 Supp. 79-3603 and repealing the

existing section.




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

Section 1. K.S.A. 2000 Supp. 79-3603 is hereby amended to read as

follows: 79-3603. For the privilege of engaging in the business of selling

tangible personal property at retail in this state or rendering or furnishing

any of the services taxable under this act, there is hereby levied and there

shall be collected and paid a tax at the rate of 4.9% and, within a rede-

velopment district established pursuant to K.S.A. 74-8921, and amend-

ments thereto, there is hereby levied and there shall be collected and

paid an additional tax at the rate of 2% until the earlier of the date the

bonds issued to finance or refinance the redevelopment project have been

paid in full or the final scheduled maturity of the first series of bonds

issued to finance any part of the project upon:

(a) The gross receipts received from the sale of tangible personal

property at retail within this state;

(b) (1) the gross receipts from intrastate telephone or telegraph serv-

ices and; (2) the gross receipts received from the sale of interstate tele-

phone or telegraph services, which (A) originate within this state and

terminate outside the state and are billed to a customer's telephone num-

ber or account in this state; or (B) originate outside this state and ter-

minate within this state and are billed to a customer's telephone number

or account in this state except that the sale of interstate telephone or

telegraph service does not include: (A) Any interstate incoming or out-

going wide area telephone service or wide area transmission type service

which entitles the subscriber to make or receive an unlimited number of

communications to or from persons having telephone service in a speci-

fied area which is outside the state in which the station provided this

service is located; (B) any interstate private communications service to

the persons contracting for the receipt of that service that entitles the

purchaser to exclusive or priority use of a communications channel or

group of channels between exchanges; (C) any value-added nonvoice

service in which computer processing applications are used to act on the

form, content, code or protocol of the information to be transmitted; (D)

any telecommunication service to a provider of telecommunication serv-

ices which will be used to render telecommunications services, including

carrier access services; or (E) any service or transaction defined in this

section among entities classified as members of an affiliated group as

provided by federal law ([26] U.S.C. Section 1504) section 1504 of the

federal internal revenue code of 1986, as in effect on January 1, 2001. For

the purposes of this subsection the term gross receipts does not include

purchases of telephone, telegraph or telecommunications using a prepaid

telephone calling card or prepaid authorization number. As used in this

subsection, a prepaid telephone calling card or prepaid authorization

number means the right to exclusively make telephone calls, paid for in

advance, with the prepaid value measured in minutes or other time units,

that enables the origination of calls using an access number or authori-

zation code or both, whether manually or electronically dialed; and (3)

the gross receipts from the provision of services taxable under this sub-

section which are billed on a combined basis with nontaxable services,

shall be accounted for and the tax remitted as follows: The taxable portion

of the selling price of those combined services shall include only those

charges for taxable services if the selling price for the taxable services can

be readily distinguishable in the retailer's books and records from the

selling price for the nontaxable services. Otherwise, the gross receipts from

the sale of both taxable and nontaxable services billed on a combined basis

shall be deemed attributable to the taxable services included therein.

Within 90 days of billing taxable services on a combined basis with non-

taxable services, the retailer shall enter into a written agreement with the

secretary identifying the methodology to be used in determining the tax-

able portion of the selling price of those combined services. The burden

of proving that any receipt or charge is not taxable shall be upon the

retailer. Upon request from the customer, the retailer shall disclose to the

customer the selling price for the taxable services included in the selling

price for the taxable and nontaxable services billed on a combined basis;

(c) the gross receipts from the sale or furnishing of gas, water, elec-

tricity and heat, which sale is not otherwise exempt from taxation under

the provisions of this act, and whether furnished by municipally or pri-

vately owned utilities;

(d) the gross receipts from the sale of meals or drinks furnished at

any private club, drinking establishment, catered event, restaurant, eating

house, dining car, hotel, drugstore or other place where meals or drinks

are regularly sold to the public;

(e) the gross receipts from the sale of admissions to any place pro-

viding amusement, entertainment or recreation services including admis-

sions to state, county, district and local fairs, but such tax shall not be

levied and collected upon the gross receipts received from sales of ad-

missions to any cultural and historical event which occurs triennially;

(f) the gross receipts from the operation of any coin-operated device

dispensing or providing tangible personal property, amusement or other

services except laundry services, whether automatic or manually operated;

(g) the gross receipts from the service of renting of rooms by hotels,

as defined by K.S.A. 36-501 and amendments thereto, or by accommo-

dation brokers, as defined by K.S.A. 12-1692, and amendments thereto;

(h) the gross receipts from the service of renting or leasing of tangible

personal property except such tax shall not apply to the renting or leasing

of machinery, equipment or other personal property owned by a city and

purchased from the proceeds of industrial revenue bonds issued prior to

July 1, 1973, in accordance with the provisions of K.S.A. 12-1740 through

12-1749, and amendments thereto, and any city or lessee renting or leas-

ing such machinery, equipment or other personal property purchased

with the proceeds of such bonds who shall have paid a tax under the

provisions of this section upon sales made prior to July 1, 1973, shall be

entitled to a refund from the sales tax refund fund of all taxes paid

thereon;

(i) the gross receipts from the rendering of dry cleaning, pressing,

dyeing and laundry services except laundry services rendered through a

coin-operated device whether automatic or manually operated;

(j) the gross receipts from the rendering of the services of washing

and washing and waxing of vehicles;

(k) the gross receipts from cable, community antennae and other sub-

scriber radio and television services;

(l) (1) except as otherwise provided by paragraph (2), the gross re-

ceipts received from the sales of tangible personal property to all con-

tractors, subcontractors or repairmen for use by them in erecting struc-

tures, or building on, or otherwise improving, altering, or repairing real

or personal property.

(2) Any such contractor, subcontractor or repairman who maintains

an inventory of such property both for sale at retail and for use by them

for the purposes described by paragraph (1) shall be deemed a retailer

with respect to purchases for and sales from such inventory, except that

the gross receipts received from any such sale, other than a sale at retail,

shall be equal to the total purchase price paid for such property and the

tax imposed thereon shall be paid by the deemed retailer;

(m) the gross receipts received from fees and charges by public and

private clubs, drinking establishments, organizations and businesses for

participation in sports, games and other recreational activities, but such

tax shall not be levied and collected upon the gross receipts received from:

(1) Fees and charges by any political subdivision, by any organization

exempt from property taxation pursuant to paragraph Ninth of K.S.A. 79-

201, and amendments thereto, or by any youth recreation organization

exclusively providing services to persons 18 years of age or younger which

is exempt from federal income taxation pursuant to section 501(c)(3) of

the federal internal revenue code of 1986, for participation in sports,

games and other recreational activities; and (2) entry fees and charges for

participation in a special event or tournament sanctioned by a national

sporting association to which spectators are charged an admission which

is taxable pursuant to subsection (e);

(n) the gross receipts received from dues charged by public and pri-

vate clubs, drinking establishments, organizations and businesses, pay-

ment of which entitles a member to the use of facilities for recreation or

entertainment, but such tax shall not be levied and collected upon the

gross receipts received from: (1) Dues charged by any organization ex-

empt from property taxation pursuant to paragraphs Eighth and Ninth of

K.S.A. 79-201, and amendments thereto; and (2) sales of memberships

in a nonprofit organization which is exempt from federal income taxation

pursuant to section 501 (c)(3) of the federal internal revenue code of

1986, and whose purpose is to support the operation of a nonprofit zoo;

(o) the gross receipts received from the isolated or occasional sale of

motor vehicles or trailers but not including: (1) The transfer of motor

vehicles or trailers by a person to a corporation solely in exchange for

stock securities in such corporation; or (2) the transfer of motor vehicles

or trailers by one corporation to another when all of the assets of such

corporation are transferred to such other corporation; or (3) the sale of

motor vehicles or trailers which are subject to taxation pursuant to the

provisions of K.S.A. 79-5101 et seq., and amendments thereto, by an im-

mediate family member to another immediate family member. For the

purposes of clause (3), immediate family member means lineal ascendants

or descendants, and their spouses. In determining the base for computing

the tax on such isolated or occasional sale, the fair market value of any

motor vehicle or trailer traded in by the purchaser to the seller may be

deducted from the selling price;

(p) the gross receipts received for the service of installing or applying

tangible personal property which when installed or applied is not being

held for sale in the regular course of business, and whether or not such

tangible personal property when installed or applied remains tangible

personal property or becomes a part of real estate, except that no tax shall

be imposed upon the service of installing or applying tangible personal

property in connection with the original construction of a building or

facility, the original construction, reconstruction, restoration, remodeling,

renovation, repair or replacement of a residence or the construction, re-

construction, restoration, replacement or repair of a bridge or highway.

For the purposes of this subsection:

(1) ``Original construction'' shall mean the first or initial construction

of a new building or facility. The term ``original construction'' shall include

the addition of an entire room or floor to any existing building or facility,

the completion of any unfinished portion of any existing building or fa-

cility and the restoration, reconstruction or replacement of a building or

facility damaged or destroyed by fire, flood, tornado, lightning, explosion

or earthquake, but such term, except with regard to a residence, shall not

include replacement, remodeling, restoration, renovation or reconstruc-

tion under any other circumstances;

(2) ``building'' shall mean only those enclosures within which individ-

uals customarily are employed, or which are customarily used to house

machinery, equipment or other property, and including the land improve-

ments immediately surrounding such building;

(3) ``facility'' shall mean a mill, plant, refinery, oil or gas well, water

well, feedlot or any conveyance, transmission or distribution line of any

cooperative, nonprofit, membership corporation organized under or sub-

ject to the provisions of K.S.A. 17-4601 et seq., and amendments thereto,

or of any municipal or quasi-municipal corporation, including the land

improvements immediately surrounding such facility; and

(4) ``residence'' shall mean only those enclosures within which indi-

viduals customarily live;

(q) the gross receipts received for the service of repairing, servicing,

altering or maintaining tangible personal property, except computer soft-

ware described in subsection (s), which when such services are rendered

is not being held for sale in the regular course of business, and whether

or not any tangible personal property is transferred in connection there-

with. The tax imposed by this subsection shall be applicable to the services

of repairing, servicing, altering or maintaining an item of tangible personal

property which has been and is fastened to, connected with or built into

real property;

(r) the gross receipts from fees or charges made under service or

maintenance agreement contracts for services, charges for the providing

of which are taxable under the provisions of subsection (p) or (q);

(s) the gross receipts received from the sale of computer software,

and the sale of the services of modifying, altering, updating or maintaining

computer software. As used in this subsection, ``computer software''

means information and directions loaded into a computer which dictate

different functions to be performed by the computer. Computer software

includes any canned or prewritten program which is held or existing for

general or repeated sale, even if the program was originally developed

for a single end user as custom computer software. The sale of computer

software or services does not include: (1) The initial sale of any custom

computer program which is originally developed for the exclusive use of

a single end user; or (2) those services rendered in the modification of

computer software when the modification is developed exclusively for a

single end user only to the extent of the modification and only to the

extent that the actual amount charged for the modification is separately

stated on invoices, statements and other billing documents provided to

the end user. The services of modification, alteration, updating and main-

tenance of computer software shall only include the modification, alter-

ation, updating and maintenance of computer software taxable under this

subsection whether or not the services are actually provided; and

(t) the gross receipts received for telephone answering services, in-

cluding mobile phone services, beeper services and other similar services;

and

(u) the gross receipts received from the sale of prepaid telephone

calling cards or prepaid authorization numbers and the recharge of such

cards or numbers. A prepaid telephone calling card or prepaid authori-

zation number means the right to exclusively make telephone calls, paid

for in advance, with the prepaid value measured in minutes or other time

units, that enables the origination of calls using an access number or

authorization code or both, whether manually or electronically dialed. If

the sale or recharge of such card or number does not take place at the

vendor's place of business, it shall be conclusively determined to take

place at the customer's shipping address; if there is no item shipped then

it shall be the customer's billing address.

Sec. 2. K.S.A. 2000 Supp. 79-3603 is hereby repealed.

Sec. 3. This act shall take effect and be in force from and after its

publication in the statute book.

Approved April 10, 2000.


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Date Composed: 09/25/2001 Date Modified: 09/25/2001