Bill Summary – FastDemocracy

Special Session of 2024
                               SENATE BILL No. 8
                                  By Senator Claeys
                                         6-18

 AN ACT concerning sales tax; relating to exemptions; providing a sales
   tax exemption for sales of firearms, firearms accessories, ammunition,
   firearm safes and firearm safety devices; amending K.S.A. 2023 Supp.
   79-3606, as amended by section 15 of 2023 Senate Bill No. 27, and
   repealing the existing section.
 6
 Be it enacted by the Legislature of the State of Kansas:
     Section 1. K.S.A. 2023 Supp. 79-3606, as amended by section 15 of
 2023 Senate Bill No. 27, is hereby amended to read as follows: 79-3606.
 The following shall be exempt from the tax imposed by this act:
     (a) All sales of motor-vehicle fuel or other articles upon which a sales
 or excise tax has been paid, not subject to refund, under the laws of this
 state except cigarettes and electronic cigarettes as defined by K.S.A. 79-
 3301, and amendments thereto, including consumable material for such
 electronic cigarettes, cereal malt beverages and malt products as defined
 by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt,
 malt syrup and malt extract, that is not subject to taxation under the
 provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles
 taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed
 pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and
 laundry services taxed pursuant to K.S.A. 65-34,150, and amendments
 thereto, and gross receipts from regulated sports contests taxed pursuant to
 the Kansas professional regulated sports act, and amendments thereto;
     (b) all sales of tangible personal property or service, including the
 renting and leasing of tangible personal property, purchased directly by the
 state of Kansas, a political subdivision thereof, other than a school or
 educational institution, or purchased by a public or private nonprofit
 hospital, public hospital authority, nonprofit blood, tissue or organ bank or
 nonprofit integrated community care organization and used exclusively for
 state, political subdivision, hospital, public hospital authority, nonprofit
 blood, tissue or organ bank or nonprofit integrated community care
 organization purposes, except when: (1) Such state, hospital or public
 hospital authority is engaged or proposes to engage in any business
 specifically taxable under the provisions of this act and such items of
 tangible personal property or service are used or proposed to be used in
 such business; or (2) such political subdivision is engaged or proposes to
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 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
     SB 8                                 3
 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, 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
     SB 8                                4
 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
 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
     SB 8                                 5
 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
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 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 v