SESSION OF 2022
SUPPLEMENTAL NOTE ON SENATE BILL NO. 339
As Amended by Senate Committee on
Assessment and Taxation

Brief*
SB 339, as amended, would amend law related to sales
tax. The bill would contain provisions related to sales taxes
on food, utilities, and separately stated delivery charges, as
well as sales taxes collected by movie theaters.

Sales Tax on Food
The bill would provide for, beginning January 1, 2024, a
state sales and use tax rate of zero percent on food and food
ingredients.
Additionally, food and food ingredients would be added
to the list of items expressly subject to sales taxes imposed
by cities, counties, and Washburn University. However, cities
and counties would be given the authority to exempt all such
sales from the sales taxes levied by the city or county.
Food and food ingredients would include bottled water,
candy, dietary supplements, food sold through vending
machines, prepared food, and soft drinks.

Sales Tax on Utilities
The bill would expand, beginning July 1, 2023, the state
sales and use tax rate of zero percent currently applied to
residential and agricultural sales of gas, electricity, heat,
propane gas, liquified petroleum gas, coal, wood, and other
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
fuel sources for the production of heat or lighting to all such
sales.
Additionally, such sales would be added to the list of
items expressly subject to sales taxes imposed by cities and
counties. However, cities and counties would be given the
authority to exempt all such sales from the sales taxes levied
by the city or county.

Movie Theater Sales Tax Collections
The bill would permit an retailer in Kansas that collects
sales tax on admission of viewing movies or films to retain the
state portion of sales and use tax collected on sales of movie
tickets and concessions sold on site from July 1, 2022, to
June 30, 2024. Such retailers would be required to continue
collecting and remitting the local portion of such sales and
use taxes. The Department of Revenue would be required to
provide appropriate forms for the sales tax retained by the
retailer to be filed in conjunction with the retailer’s sales tax
return.

Delivery Charge Sales Tax
The bill would exclude delivery charges that are
separately stated on an invoice or similar document from the
sales price for purposes of retail sales and compensating use
tax.

Background
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Tyson.


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Senate Committee on Assessment and Taxation
In the Senate Committee hearing, proponent testimony
was offered by representatives of AARP of Kansas, Fuel True
Independent Energy & Convenience, Kansas Association of
Counties, Kansas Interfaith Action, Kansas Restaurant and
Hospitality Association, Retail Grocers Association of Kansas
and Missouri, and Sisters of Charity of Leavenworth.
Proponents stated the bill would reduce the sales tax burden
on those least able to pay and would treat all food equally.
Written-only proponent testimony was provided by the City of
Topeka, El Centro, the Greater Kansas City Chamber of
Commerce, Greater KC Food Policy Coalition, Harvesters,
Health Forward Foundation, Kansas Aggregate Producers
Association, Kansas Association of Local Health
Departments, Kansas National Education Association,
Kansas Ready Mix Concrete Association, and a private
citizen.
Neutral testimony was provided by representatives of
Economic Lifelines, Kansas Action for Children, Kansas
Coalition Against Sexual and Domestic Violence, Kansas
Contractor’s Association, League of Kansas Municipalities,
Tobacco Free Kansas Coalition, and Washburn University.
Written-only neutral testimony was provided by
representatives of American Council of Engineering
Companies of Kansas, Americans for Prosperity-Kansas,
Kansas Appleseed Center for Law and Justice, Kansas
Chamber of Commerce, Kansas Policy Institute, Kansas
Society of Professional Engineers, and a private citizen.
Opponent testimony was provided by a representative
of Kansas Farm Bureau, stating the bill would erode the
state’s retail sales tax base. Written-only opponent testimony
was provided by the Department of Transportation.
The Senate Committee amended the bill by:


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 ● Changing the effective date of the sales tax on food
rate reduction from January 1, 2023, to January 1,
2024;
● Giving cities and counties the authority to exempt
food from sales tax;
● Expressly providing for food and food ingredients
to be subject to the sales tax imposed by
Washburn University; and
● Inserting contents from SB 228 (Movie Theaters),
SB 327 (Delivery Charges), and SB 359 (Utilities).
SB 228 (Movie Theaters)
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Claeys.
In the Senate Committee hearing, proponent testimony
was provided by representatives of B&B Theatres, Mitchell
Farms & Theatres, and Regal. Proponents stated the
pandemic and associated business restrictions have been
particularly hard on the movie theater industry as movie
studios declined to release new movies through the latter
parts of 2020 and early parts of 2021.
Written-only proponent testimony was provided by
representatives of AMC Theatres and Theatre Owners of Mid-
America.
Written-only neutral testimony was provided by a
representative of the League of Kansas Municipalities.

SB 327 (Delivery Charges)
The bill was introduced by the Senate Committee on
Taxation at the request of Senator Tyson.

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 In the Senate Committee hearing, proponent testimony
was provided by a private citizen. The proponent stated the
bill would provide tax relief to consumers and eliminate a tax
that many consumers do not realize they are paying. No other
testimony was provided.

SB 359 (Utilities)
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Tyson.

Fiscal Information
The Department of Revenue provided the following
estimated fiscal impacts for the provisions of the amended
bill.
(In Millions)
FY 2023 FY 2024 FY 2025
State General Fund
Food Sales Tax Rate $ - $ (273.2) $ (668.2)
Food Sales Tax Credit Sunset - - 10.3
Utilities Sales Tax - (46.8) (52.1)
Movie Theaters (5.3) (5.8) (0.5)
Delivery Charges (4.0) (4.0) (4.0)
SGF Subtotal $ (9.3) $ (329.8) $ (724.8)

State Highway Fund
Food Sales Tax $ - $ (52.6) $ (128.7)
Utilities Sales Tax - (9.0) (10.0)
Movie Theaters (1.0) (1.1) (0.1)
Delivery Charges (0.8) (0.8) (0.8)
SHF Subtotal $ (1.8) $ (63.5) $ (139.6)

All Funds Total $ (11.1) $ (393.3) $ (864.4)
Taxation; sales tax; food sales tax; utilities; movie theaters; delivery charges

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Statutes affected:
As introduced: 12-189a, 79-32, 79-3602, 79-3603, 79-3703
As Amended by Senate Committee: 12-189a, 13-13a39, 79-32, 79-3602, 79-3603, 79-3703