The bill amends K.S.A. 2024 Supp. 79-3606 to clarify and expand the list of exemptions from sales tax in Kansas, specifically for sales of motor-vehicle fuel, tangible personal property, and services purchased by entities such as the state, political subdivisions, and nonprofit organizations, provided these are used exclusively for designated purposes. It maintains existing exemptions for items like motor vehicles and drycleaning services while detailing the conditions for these exemptions. Additionally, the bill introduces new provisions requiring contractors to obtain exemption certificates for materials purchased for construction projects related to public or private nonprofit hospitals and schools, emphasizing compliance and penalties for misuse of these certificates.

Furthermore, the bill outlines specific exemptions for various nonprofit organizations recognized under section 501(c)(3) of the federal Internal Revenue Code, allowing them to purchase tangible personal property and services tax-free for charitable purposes. It establishes requirements for contractors working with these organizations, including the necessity of obtaining exemption certificates and maintaining records for audit purposes. The bill also clarifies that if materials purchased under these exemptions are not used as intended, the nonprofit organization will be liable for the sales tax, and it introduces penalties for misuse of exemption certificates. Overall, the bill aims to support nonprofit organizations and enhance compliance with tax regulations while providing tax relief for essential services.

Statutes affected:
As introduced: 79-3606, 79-32