The bill amends K.S.A. 2024 Supp. 79-3606 to enhance and clarify the exemptions from sales tax in Kansas, particularly for various nonprofit organizations, educational institutions, and political subdivisions. Key insertions include exemptions for sales of tangible personal property or services used exclusively for the entities' purposes, such as by public or private nonprofit hospitals and educational institutions. The bill also specifies that these exemptions do not apply if the entities engage in taxable business activities or use the items for utility provision. Additionally, it outlines procedures for contractors working on projects for these exempt entities, requiring them to obtain exemption certificates and maintain records for audit purposes.

Moreover, the bill expands the list of exemptions to include sales of farm machinery, aquaculture equipment, and materials for projects funded by political subdivisions. It clarifies definitions related to "business" and "retail business," and specifies conditions for issuing project exemption certificates. The bill also introduces penalties for misuse of exemption certificates and mandates that the Secretary of Revenue adopt necessary regulations to administer these provisions. Overall, the legislation aims to streamline the tax exemption process while ensuring compliance and accountability among contractors and exempt entities, thereby supporting various sectors, including agriculture, manufacturing, and nonprofit services.

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