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--- version:As Introduced+++ version:(document, no version)@@ -150,4940 +150,187 @@Search-HB 2038›--HB 2038 — As Introduced-Kansas Legislature-HB 2038 — As Introduced+Fisc Note Hb2038 00 0000picture_as_pdfDownload PDF-Session of 2025--HOUSE BILL No. 2038--By Committee on Commerce, Labor and Economic Development--Requested by Stuart Little on behalf of Grow Kansas Film--1-21--1AN ACT concerning economic development; enacting the Kansas film and--2digital media production development act; establishing an income tax--3credit and sales tax exemption program to be administered by the--4secretary of commerce for the purpose of developing film, video or--5digital production in Kansas; amending K.S.A. 2024 Supp. 79-3606--6and repealing the existing section.--7--8Be it enacted by the Legislature of the State of Kansas:--9New Section 1. Sections 1 through 6, and amendments thereto, shall--10be known and may be cited as the Kansas film and digital media--11production development act. The purpose of the Kansas film and digital--12media production development act is to incentivize film, video or digital--13media productions in Kansas and facilitate the development and growth of--14a film, video or digital media production industry and associated--15businesses supporting the industry in this state.--16New Sec. 2. As used in this act:--17(a) "Above-the-line personnel" means any individual hired or credited--18on screen for an eligible production for work on the production or--19postproduction of film as a:--20(1) Principal cast member compensated for the eligible production--21project at a screen actors guild schedule f or above payment rate; or--22(2) producer, screenwriter or director.--23(b) "Act" means the Kansas film and digital media production--24development act, sections 1 through 6, and amendments thereto.--25(c) "Affiliates" means those entities that are included in the--26production company's affiliated group as defined in section 1504(a) of the--27internal revenue code, 26 U.S.C. § 1504(a), and all other entities that are--2850% or more owned, directly or indirectly, by members of the affiliated--29group.--30(d) "Based in Kansas" or "Kansas-based" means, in reference to a--31vendor, production company or company, that the vendor, production--32company or company is subject to income tax liability under the Kansas--33income tax act and has a physical presence in Kansas and, with respect to a--34production company, has maintained a physical presence in Kansas for at--35least six months prior to submitting an application to the secretary--1pursuant to section 3, and amendments thereto.--2(e) "Certified production" or "certified project" means an eligible--3production or project that has agreed to one or more qualified Kansas--4promotions and that has been approved by the secretary as eligible for tax--5incentives pursuant to the provisions of section 3, and amendments--6thereto.--7(f) "Crew" means any individual who works on production or--8postproduction for an eligible production. "Crew" does not include above---9the-line personnel.--10(g) (1) "Eligible production" or "eligible project" means a production:--11(A) (i) Of a new film, video or digital project, or a portion or portions--12of such project, produced in this state, including a feature film,--13documentary, series, pilot, movie for television, televised commercial--14advertisement, music video, video game, content-based mobile application--15or a virtual reality, augmented reality, multi-media or new media project;--16(ii) produced in whole or in part, in short or in long form, and may--17include animation, music and green screen, motion capture and similar--18production techniques;--19(iii) fixed on a delivery system including, but not limited to, film--20format or reels, videotape, computer drive or disc, laser disc or any--21element of the digital domain, from which the program or completed--22project is viewed or reproduced; and--23(iv) intended for multimarket commercial distribution via theaters,--24video on demand, direct to DVD, broadcast streaming, digital platforms or--25electronic delivery systems designed for the distribution or playing of--26interactive games, licensing for exhibition by individual television--27stations, groups of stations, networks, national or regional syndication,--28advertiser-supported sites, cable television stations, streaming companies--29or public broadcasting stations; and--30(B) that incurs or is reasonably anticipated to incur qualified--31production or postproduction expenses of at least $50,000, as determined--32by the secretary.--33(2) "Eligible production" or "eligible project" does not include:--34(A) The coverage of news or athletic events, local advertising, local--35interest programming, instructional videos, corporate videos, any project--36that is not intended for multimarket commercial distribution or any portion--37of a project not shot, recorded or created in Kansas; and--38(B) any production of obscene material or an obscene performance as--39defined in K.S.A. 21-6401, and amendments thereto.--40(3) For purposes of the income tax credit as allowed under section--414(f), and amendments thereto, "eligible production" or "eligible project"--42means the same as defined in paragraphs (1) and (2), except that a--43production not intended for multimarket commercial distribution may be--1included and the amount of eligible expenses required shall be at least--2$25,000.--3(h) "Eligible television series" means a certified series television--4production project intended for multimarket commercial distribution, with--5an order for multiple episodes in a single season, not less than 25% of the--6series season is filmed within Kansas and the production incurs qualifying--7eligible expenses of more than $50,000.--8(i) "Eligible wages and salaries" means:--9(1) (A) Wages or salaries paid by the production company to crew for--10work in Kansas designated as for production or for postproduction of an--11eligible production;--12(B) the production company is required to remit withholding--13payments for such wages or salaries to the department of revenue under--14the Kansas withholding and declaration of estimated tax act; and--15(C) at least 10% of the crew are residents of this state. The secretary--16and the Kansas arts industry director may agree upon a higher percentage--17requirement for Kansas residency of the crew; and--18(2) the amounts of wages, salaries or payments paid to above-the-line--19personnel, except that the eligible amount of such wages, salaries or--20payments shall not comprise more than 25% of total qualified production--21expenditures.--22(j) "Film" means a professional single media, multimedia, video or--23audiovisual program or feature, that may be digital, that is not obscene--24material or an obscene performance as defined in K.S.A. 21-6401, and--25amendments thereto. "Film" includes, but is not limited to, film produced--26for an interactive game or a documentary, special, music video, television--27commercial or television program, or a portion thereof, that is filmed or--28taped for cable, television, streaming network, national or regional--29syndication or for a feature-length motion picture intended for theatrical--30release or for network, streaming, national or regional syndication or--31broadcast.--32(k) "High-impact production" means a certified production for which--33production or postproduction expenditures are at least $50,000,000, and at--34least 1/3 of such total expenditures constitute qualified expenditures--35approved by the secretary.--36(l) "Kansas film media industry development expenditure" means--37documented financial, promotional or in-kind contributions or educational--38or workforce development efforts, at standard rates set by the secretary in--39consultation with the Kansas creative arts industries commission, in--40partnership with related Kansas industry labor organizations or educational--41institutions, toward the furtherance of the Kansas film or digital media--42industry. Promotional efforts include, but are not limited to, the promotion--43of the Kansas industry by directors, actors or producers affiliated with the--1production company's project through social media that is managed by the--2state, radio or television interviews facilitated by the department of--3commerce, enhanced screen credit acknowledgments or related events that--4are facilitated, conducted or sponsored by the secretary or the Kansas--5creative arts industries commission.--6(m) "Multi-film deal" means a certified project in which a production--7company films at least 75% of main crew principal photography for three--8or more films in this state within five years.--9(n) "Nonresident crew member" means an individual who is not a--10Kansas resident and is hired for work on an eligible production project--11within this state.--12(o) "Production company" means a person, producer or company that--13produces film, including, but not limited to, for exhibition in theaters,--14television, interactive games, cable, syndication or streaming networks.--15"Production company" includes affiliates of a production company when--16approved by the secretary and identified in the agreement executed--17pursuant to section 3, and amendments thereto.--18(p) (1) "Postproduction expenditures" means expenditures made in--19Kansas directly for postproduction activities in Kansas for an eligible--20production by a production company, including, but not limited to, the--21following categories:--22(A) Eligible wages or salaries of above-the-line personnel or crew--23designated as postproduction;--24(B) sound synchronization, recording or mixing;--25(C) color grading;--26(D) editing and related services;--27(E) visual effects or special effects;--28(F) computer graphics, special effects or animation services;--29(G) film processing or format transfers;--30(H) music production, recording, mixing or composition;--31(I) licensing of music produced in this state or created by a Kansas--32resident;--33(J) rental of facilities or equipment;--34(K) leasing of vehicles, including, but not limited to, leasing of--35airplanes, for postproduction-related transportation and costs of food and--36lodging; and--37(L) other direct postproduction costs of an eligible production in--38accordance with generally accepted entertainment industry practices.--39(2) "Postproduction expenditures" does not include:--40(A) Goods, equipment or vehicles not purchased, rented or leased in--41Kansas from a Kansas-based vendor and when not used in Kansas;--42(B) any expenditures for activities, work or services not conducted in--43Kansas and not performed by a Kansas-based vendor. A vendor that acts as--1a conduit to enable purchases, rentals or leases to qualify as "production--2expenditures" that would not otherwise qualify shall not be considered a--3Kansas-based vendor with respect to such purchases, rentals or leases; or--4(C) costs for footage shot outside this state, marketing, story rights or--5distribution.--6(q) (1) "Production expenditures" means expenditures made in--7Kansas directly related to or used for production activities in this state for--8an eligible production by a production company, including, but not limited--9to, the following categories:--10(A) Eligible wages or salaries of above-the-line personnel or crew--11designated as production;--12(B) set construction, maintenance, repair or modification, set--13furnishings and operations, wardrobe, make-up, materials used to construct--14costumes, props or scenery, accessories and related services;--15(C) scripts, musical scores or storyboards and drafting and design--16supplies;--17(D) photography, sound synchronization, lighting and related--18services;--19(E) editing and related services;--20(F) rental of buildings, facilities or equipment and leasing of vehicles,--21including, but not limited to, leasing of airplanes;--22(G) transportation costs, including, but not limited to, leasing of--23vehicles or airplanes, directly related to production activities in Kansas;--24(H) food and lodging;--25(I) sound recording or mixing services;--26(J) computer graphics, special effects and animation services;--27(K) film processing or format transfers;--28(L) airfare if purchased through a Kansas travel agency;--29(M) insurance costs and bonding if purchased through a Kansas--30insurance agency; and--31(N) other direct costs of producing film in accordance with generally--32accepted entertainment industry practices.--33(2) "Production expenditures" does not include:--34(A) Goods, equipment or vehicles not purchased, rented or leased in--35Kansas from a Kansas-based vendor;--36(B) any expenditures for activities, work or services not conducted in--37Kansas and services not performed at the filming site unless the vendor is--38a Kansas-based vendor; and--39(C) postproduction expenditures as defined in subsection (p) when--40used for postproduction activities.--41(r) "Qualified postproduction expenditures" means the funds actually--42invested and expended by a production company that are postproduction--43expenditures made in this state and that are directly used in a certified--1production, including, but not limited to, any Kansas film media industry--2development expenditures, and approved by the secretary. "Qualified--3postproduction expenditures" shall not exceed the usual and customary--4cost of the goods or services acquired. The secretary or the secretary of--5revenue may determine the value of the goods or services for purposes of--6this section when the buyer and seller are affiliates, or the sale or purchase--7is not an arm's length transaction. "Qualified postproduction expenditures"--8does not include postproduction expenditures for which another taxpayer--9claims the production tax credit pursuant to section 4, and amendments--10thereto.--11(s) "Qualified production expenditures" means the funds actually--12invested and expended by a production company that are production--13expenditures made in this state and directly used in a certified production,--14including any Kansas film media industry development expenditures, and--15approved by the secretary. "Qualified production expenditures" shall not--16exceed the usual and customary cost of the goods or services acquired. The--17secretary or the secretary of revenue may determine the value of the goods--18or services for purposes of this act when the buyer and seller are affiliates,--19or the sale or purchase is not an arm's length transaction. "Qualified--20production expenditures" does not include production expenditures for--21which another taxpayer claims the production tax credit pursuant to--22section 4, and amendments thereto. "Qualified production expenditures"--23does not include wages, salaries or payment paid to above-the-line--24personnel that constitute more than 25% of total production expenditures.--25(t) "Qualified Kansas promotion" means a promotion of this state,--26approved by the secretary as to content, distribution, duration and--27placement within a production, video or interactive game or in associated--28online or other promotions, that consists of a static or animated logo that--29promotes Kansas, an embedded Kansas promotion or a Kansas--30advertisement and that may include a link to a Kansas website.--31(u) "Secretary" means the secretary of commerce.--32(v) "Vendor" means a business that sells or leases goods or services--33that are related to standard production industry inventory or services.--34"Vendor" does not include a personal services business.--35New Sec. 3. (a) There is hereby created the Kansas film and digital--36media industry development program. The purpose of the Kansas film and--37digital media industry development program is to:--38(1) Provide tax incentives for eligible projects produced in Kansas by--39production companies that meet the requirements of this act and are--40approved as certified projects by the secretary of commerce; and--41(2) provide tax incentives, support programs or services, including,--42but not limited to, professional development, infrastructure investments--43and marketing efforts to develop film and digital media industry-related--1Kansas businesses.--2(b) (1) The program shall be administered by the secretary. The--3secretary shall consult with the Kansas creative arts industries commission--4in administering this act to ensure the best possible use of Kansas--5resources for promoting and developing film and digital media production--6and related industry in Kansas.--7(2) In determining whether to approve a project as a certified project,--8the secretary shall consider the immediate impact and potential future--9impact of the project on the development and growth of the Kansas film,--10video and digital media production industry. The secretary may limit, by--11category, specified eligible expenditures or total amounts of eligible--12production or postproduction expenditures that may be approved by the--13secretary as qualified production or postproduction expenditures.--14(3) The aggregate total amount of income tax credits awarded in a tax--15year pursuant to this act shall not exceed the amount specified in section 4,--16and amendments thereto. The secretary shall designate the percentage--17specified in section 4, and amendments thereto, of such aggregate total--18amount in each tax year for tax credits for Kansas-based production--19companies to fulfill the purpose of this act as described in subsection (a)--20(2).--21(c) To be eligible for an income tax credit or a sales tax exemption--22pursuant to section 4, and amendments thereto, subsection (e) and section--237, and amendments thereto, respectively, a production company shall, prior--24to the commencement of the project or of principal photography, submit--25the following to the secretary in the form and manner and with such--26documentation and other information as required by the secretary:--27(1) An application for approval of the production as an eligible--28production and for designation as a certified production;--29(2) evidence of adequate financing for the project;--30(3) evidence of a certificate of general liability insurance with a--31minimum coverage of $1,000,000, or a greater amount if required by the--32secretary, and workers compensation coverage in compliance with Kansas--33law that shall include coverage of employer liability;--34(4) a description of the project, timelines and anticipated completion--35dates, anticipated eligible expenditures and project activities to be--36conducted in Kansas, anticipated employment of crew or above-the-line--37personnel who are Kansas residents, use of Kansas-based vendors and any--38anticipated construction or contribution of production infrastructure or--39participation in Kansas film and digital media industry development--40activities; and--41(5) an economic impact statement showing the estimated economic--42impact of the project. Such economic impact statement shall indicate the--43impact on the region of the state in which the project production or--1production-related activities are conducted and any impact on the state as a--2whole. The economic impact statement shall be prepared at the applicant's--3expense by a firm and in the manner approved by the secretary. The--4secretary may consider the size of the project when determining the scope--5and information required.--6(d) (1) If the secretary determines that the project is an eligible--7project and approves the application, the production company shall enter--8into an agreement with the secretary prior to the commencement of the--9project on such terms and conditions as the secretary may require. Such--10terms and conditions shall include, but not be limited to, qualified Kansas--11promotions to be provided and any limitations the secretary may impose--12on the amounts of eligible production or postproduction expenditures that--13may be approved by the secretary as qualified expenditures, whether in--14total or for specified eligible expenditures or specified eligible expenditure--15categories.--16(2) The production company shall agree to the provision of--17documentation and information to the secretary or the secretary of revenue--18on a regular basis as requested by the secretary or secretary of revenue to--19determine qualified production or postproduction expenditures,--20compliance with the requirements of this act or rules and regulations--21adopted by the secretary or the secretary of revenue and the progress of the--22project and estimated completion date.--23(3) The terms and conditions shall include, but not be limited to,--24provisions:--25(A) For waiver of any income tax credits or sales tax exemptions--26authorized pursuant to this act but not received by a production company,--27termination of any future tax credits or exemptions pursuant to this act and--28repayment of income tax credits received or sales tax exempted if--29requirements of this act or rules and regulations are not met or terms of the--30agreement are breached by the production company;--31(B) requiring cooperation with any audit conducted pursuant to this--32act; and--33(C) for submission of information as required for publication on the--34Kansas economic incentive database and for the secretary's reports to the--35legislature as provided by section 5, and amendments thereto.--36(4) The terms and conditions may also include agreements by the--37production company for the facilitation of, coordination with or provision--38of support services for Kansas businesses and organizations to enable--39participation in the project or the development of the Kansas film and--40digital media industry.--41(5) If the secretary approves the agreement with the production--42company, the secretary shall authorize the eligible project as a certified--43project.--1(e) Upon approval by the secretary as an eligible and certified project--2and the execution of the agreement as provided in subsection (d), the--3secretary may approve an application by the production company for a--4sales tax exemption for production or postproduction expenditures--5pursuant to the provisions of K.S.A. 79-3606(xxxx), and amendments--6thereto, and shall notify the applicant and the secretary of revenue of such--7approval. In considering approval of such sales tax exemption, the--8secretary shall prioritize expenditures in rural areas or in economically--9depressed urban areas to the extent feasible. The secretary may require that--10all or a portion of expenditures eligible for exemption from sales tax be--11made with businesses located in such areas. A production company--12receiving a sales tax exemption shall provide the secretary or the secretary--13of revenue with such documentation as requested by the secretary or the--14secretary of revenue to demonstrate that expenditures have been made as--15required.--16(f) Prior to receipt by a production company of any income tax credit--17authorized by section 4, and amendments thereto, the secretary shall--18examine and determine the amount of eligible production or eligible--19postproduction expenditures that are qualified production expenditures or--20qualified postproduction expenditures of the production company and that--21such expenditures are for a certified production. No expenditure that was--22exempt from sales taxation pursuant to K.S.A. 79-3606(xxxx), and--23amendments thereto, shall also be a basis for the income tax credit--24pursuant to section 4, and amendments thereto, unless specifically--25approved by the secretary. The production company shall provide such--26information and documentation as requested by the secretary to enable the--27secretary to determine if expenditures are authorized and whether both--28exempted from sales tax and utilized as a basis for such income tax credit.--29In addition, the production company shall provide evidence as required by--30the secretary that:--31(1) The production company has filed all Kansas tax returns and tax--32documents required by law and withholding taxes have been submitted as--33required by law;--34(2) all crew who are Kansas residents and Kansas-based vendors have--35been paid and that there are no pending liens in this state against the--36production company; and--37(3) the certified project for which a sales tax exemption has been--38granted or an income tax credit is requested has been completed, or in the--39discretion of the secretary, a phase of the certified project has been--40completed and adequate assurance, as determined by the secretary, has--41been provided that the project will be fully completed.--42(g) As a condition of receiving any income tax credits pursuant to this--43act, the production company shall provide the secretary with a report by a--1certified public accountant licensed to practice in Kansas, prepared at the--2expense of the applicant, verifying that the expenditures have been made--3in compliance with the requirements of this act. The report shall be--4provided with a claim for income tax credits as required by section 4, and--5amendments thereto, and as otherwise required by the secretary.--6(h) The secretary shall notify the production company and the--7secretary of revenue of determinations of qualified expenditures made by--8the secretary. The secretary shall notify the secretary of revenue if the--9secretary disqualifies the production company for tax credits or--10exemptions or requires repayment of such tax benefits pursuant to the--11provisions of this act.--12(i) Any repayment of income tax credits or sales or use tax--13exemptions by a production company pursuant to this act shall be made to--14the secretary. The secretary shall remit all moneys received from such--15repayments to the state treasurer in accordance with the provisions of--16K.S.A. 75-4215, and amendments thereto. Upon receipt of each such--17remittance, the state treasurer shall deposit the entire amount in the state--18treasury to the credit of the state general fund.--19(j) The secretary and the secretary of revenue may adopt rules and--20regulations to implement the provisions of this act.--21New Sec. 4. (a) For tax years 2025 through 2034, for any production--22company or its affiliates that make qualified production or qualified--23postproduction expenditures for a certified production approved by the--24secretary of commerce as provided by section 3, and amendments thereto,--25there shall be allowed an income tax credit against the tax imposed under--26the Kansas income tax act based on the certified production company's--27qualified expenditures as determined pursuant to subsection (d) and as--28limited by subsection (h). The tax credit shall be applied against the--29production company's income tax liability for the taxable year in which the--30qualified expenditures are made by the production company. If the amount--31of the tax credit allowed exceeds the production company's income tax--32liability for the taxable year, the production company may carry over the--33amount of the tax credit that exceeds such tax liability for deduction from--34the production company's income tax liability in the next succeeding--35taxable year or years until the total amount of the tax credit has been--36deducted from the production company's tax liability, except that no such--37tax credit shall be carried over for deduction after the 10th taxable year--38succeeding the year in which the applicable qualified expenditures were--39made by the production company. If the production company is a--40corporation having an election in effect under subchapter S of the federal--41internal revenue code, a partnership or a limited liability company, the--42credit shall be claimed by the shareholders of such corporation, the--43partners of such partnership or members of such limited liability company--1in the same manner as such shareholders, partners or members account for--2their proportionate shares of the income or loss of the corporation,--3partnership or limited liability company and in accordance with the--4agreement executed pursuant to section 3, and amendments thereto. The--5tax credit may be transferred as provided by subsection (k).--6(b) A claim for a tax credit shall be filed with the secretary of revenue--7as part of a return filed by the production company pursuant to the Kansas--8income tax act. The order that agreements are executed with the secretary--9of commerce pursuant to section 3, and amendments thereto, shall--10determine the order that tax credits are allocated by the secretary of--11revenue. A claim shall be submitted with a return or amended return within--12one calendar year of the date of the last eligible production expenditure or--13the last eligible postproduction expenditure for the certified production--14that would be eligible for an income tax credit as provided by subsection--15(a). A request or requests by a production company for an extension of--16time to submit a claim shall be granted by the secretary of revenue not to--17exceed a total time extension of six months. All qualified production--18expenditures or postproduction expenditures incurred during the taxable--19year by a production company for a certified production shall be submitted--20for credit as part of the same income tax return. A tax credit claim for--21qualified expenditures during a taxable year shall not be divided and--22submitted with multiple returns or in multiple years.--23(c) The claim shall include a copy of the project certification and the--24determination of qualified production or postproduction expenditures by--25the secretary of commerce. The claim shall also include a report by a--26certified public accountant licensed to practice in Kansas, prepared at the--27expense of the applicant, verifying that the expenditures have been made--28in compliance with the requirements of this act.--29(d) The amount of the tax credit shall be equal to 30% of:--30(1) The qualified production expenditures for the certified project; or--31(2) the qualified postproduction expenditures for a certified project--32with no qualified production expenditures.--33(e) The secretary of commerce may approve additional credits as--34follows:--35(1) In addition to the amount authorized by subsection (d)(1):--36(A) Up to 5% of the qualified production expenditures for a certified--37multi-film deal, a certified eligible television series, a certified high-impact--38production or contributions to film-related infrastructure or workforce--39development in Kansas, including, but not limited to, contributions to--40permanent sets, sound stages, film editing facilities, computer graphics,--41special effects or animation facilities, educational facilities or programs,--42internships or apprenticeships or equipment for production activities, in--43the amount such contributions are approved by the secretary; or--1(B) up to 5% for qualified production expenditures for a production if--250% or more of the crew or above-the-line personnel are Kansas residents;--3or--4(2) in addition to the amount authorized under subsection (d)(1) or--5(2), up to an additional 5% of the amount of the qualified production--6expenditures or qualified postproduction expenditures, as applicable, of a--7certified project of a production company that has previously received an--8income tax credit under this act with respect to such certified project.--9(f) In addition to or in lieu of the credits authorized by subsection (d),--10as determined by the secretary, a Kansas-based production company that--11incurs at least $25,000 in qualified production or postproduction--12expenditures, including, but not limited to, expenditures for a certified--13production not intended for multimarket distribution but that otherwise--14constitute qualified expenditures and meets all other qualifications for a--15tax credit under this act shall receive a tax credit in the amount of 25% of--16such qualified expenditures. The tax credit shall be applied against the--17Kansas-based production company's income tax liability for the taxable--18year in which the qualified expenditures are made by the Kansas-based--19production company. If the amount of the tax credit exceeds the Kansas---20based production company's income tax liability, the Kansas-based--21production company may carry over the amount of the tax credit that--22exceeds such tax liability for deduction from the Kansas-based production--23company's income tax liability in the next succeeding taxable year or years--24until the total amount of the tax credit has been deducted from the Kansas---25based production company's tax liability, except that no such tax credit--26shall be carried over for deduction after the 10th taxable year succeeding--27the year in which the applicable qualified expenditures were made by the--28Kansas-based production company. If the Kansas-based production--29company is a corporation having an election in effect under subchapter S--30of the federal internal revenue code, a partnership or a limited liability--31company, the credit shall be claimed by the shareholders of such--32corporation, the partners of such partnership or members of such limited--33liability company in the same manner as such shareholders, partners or--34members account for their proportionate shares of the income or loss of--35the corporation, partnership or limited liability company and in accordance--36with the agreement executed pursuant to section 3, and amendments--37thereto. The tax credit may be transferred as provided by subsection (k).--38(g) The amount of a tax credit or portion thereof based on a qualified--39production or postproduction expenditure for a nonresident, above-the-line--40individual shall be limited to not more than $500,000 in each taxable year.--41(h) The maximum cumulative amount of all income tax credits--42awarded to a production company for a certified project for a taxable year--43shall not exceed 40% of the total qualified production expenditures or--1qualified postproduction expenditures made by the production company--2for that certified project during that taxable year.--3(i) For purposes of determining the payment of credit claims pursuant--4to this section, the secretary of revenue may require that credit claims of--5affiliates be combined into one claim if necessary to accurately reflect--6closely integrated activities of affiliates.--7(j) If a production company hires another production company to--8produce a project or contribute elements of a project for pay, the hired--9company shall be considered a service provider for the hiring company,--10and the hiring company shall be entitled to the income tax credit--11authorized by this section.--12(k) A tax credit allowed pursuant to this section may be transferred, in--13whole or in part, by the production company or, if applicable as provided--14by subsection (a), a shareholder, partner or member, to one or more--15transferees. The transferor shall provide notification and documentation of--16the transfer or transfers with the transferor's claim for a tax credit pursuant--17to subsection (b). Such claim shall be filed with the secretary of revenue in--18such form and manner and with all information as may be required by the--19secretary of revenue, including, but not limited to, all information--20requested regarding the transferee. The transferor shall make the transfer--21within the calendar year in which the transferor's claim is made to the--22secretary of revenue. The credit shall only be transferred once. The--23transferor may transfer the credit to any individual or entity subject to--24income tax under the Kansas income tax act. The transferred credit shall--25be claimed by the transferee against the transferee's Kansas income tax--26liability in the taxable year the credit was transferred. The amount of the--27transferred credit that exceeds the transferee's tax liability for such year--28may be carried over for deduction from the transferee's income tax liability--29in the next succeeding taxable year or years until the total amount of the--30tax credit has been deducted from the transferee's tax liability, except that--31no such tax credit shall be carried over for deduction after the 10th taxable--32year succeeding the taxable year in which the credit was transferred to the--33transferee. The transferor or transferee shall provide such documentation--34of the transfer to the secretary of revenue as may be required by the--35secretary of revenue and at such time or times as may be required by the--36secretary of revenue.--37(l) The aggregate total amount of credits allowed under this section--38shall not exceed $10,000,000 in a tax year. Ten percent of such aggregate--39total in each tax year shall be designated by the secretary of commerce for--40tax credits to Kansas-based production companies.--41New Sec. 5. On or before January 31, 2026, and each January 31--42thereafter through January 31, 2035, the secretary shall submit an annual--43report to the house of representatives standing committees on commerce,--1labor and economic development and taxation and the senate standing--2committees on commerce and assessment and taxation. The report shall--3include the amounts and recipients of tax incentives approved by the--4secretary pursuant to this act for the prior year and to the date of the report,--5anticipated tax incentive amounts for the current year, the production--6companies that have applied for and that have been certified for projects, a--7description of ongoing and completed projects and the impact of such--8projects and the program on the film, video or digital production industry--9in Kansas. The secretary of revenue shall provide the secretary with--10information as necessary for the report in accordance with the terms of the--11agreements required by section 3, and amendments thereto.--12New Sec. 6. No sales tax exemption or income tax credit pursuant to--13sections 1 through 5, and amendments thereto, shall apply to or be--14awarded for production or postproduction expenditures made on or after--15January 1, 2035.--16Sec. 7. K.S.A. 2024 Supp. 79-3606 is hereby amended to read as--17follows: 79-3606. The following shall be exempt from the tax imposed by--18this act:--19(a) All sales of motor-vehicle fuel or other articles upon which a sales--20or excise tax has been paid, not subject to refund, under the laws of this--21state except cigarettes and electronic cigarettes as defined by K.S.A. 79---223301, and amendments thereto, including consumable material for such--23electronic cigarettes, cereal malt beverages and malt products as defined--24by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt,--25malt syrup and malt extract, that is not subject to taxation under the--26provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles--27taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed--28pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and--29laundry services taxed pursuant to K.S.A. 65-34,150, and amendments--30thereto, and gross receipts from regulated sports contests taxed pursuant to--31the Kansas professional regulated sports act, and amendments thereto;--32(b) all sales of tangible personal property or service, including the--33renting and leasing of tangible personal property, purchased directly by the--34state of Kansas, a political subdivision thereof, other than a school or--35educational institution, or purchased by a public or private nonprofit--36hospital, public hospital authority, nonprofit blood, tissue or organ bank or--37nonprofit integrated community care organization and used exclusively for--38state, political subdivision, hospital, public hospital authority, nonprofit--39blood, tissue or organ bank or nonprofit integrated community care--40organization purposes, except when: (1) Such state, hospital or public--41hospital authority is engaged or proposes to engage in any business--42specifically taxable under the provisions of this act and such items of--43tangible personal property or service are used or proposed to be used in--1such business; or (2) such political subdivision is engaged or proposes to--2engage in the business of furnishing gas, electricity or heat to others and--3such items of personal property or service are used or proposed to be used--4in such business;--5(c) all sales of tangible personal property or services, including the--6renting and leasing of tangible personal property, purchased directly by a--7public or private elementary or secondary school or public or private--8nonprofit educational institution and used primarily by such school or--9institution for nonsectarian programs and activities provided or sponsored--10by such school or institution or in the erection, repair or enlargement of--11buildings to be used for such purposes. The exemption herein provided--12shall not apply to erection, construction, repair, enlargement or equipment--13of buildings used primarily for human habitation, except that such--14exemption shall apply to the erection, construction, repair, enlargement or--15equipment of buildings used for human habitation by the cerebral palsy--16research foundation of Kansas located in Wichita, Kansas, multi--17community diversified services, incorporated, located in McPherson,--18Kansas, the Kansas state school for the blind and the Kansas state school--19for the deaf;--20(d) all sales of tangible personal property or services purchased by a--21contractor for the purpose of constructing, equipping, reconstructing,--22maintaining, repairing, enlarging, furnishing or remodeling facilities for--23any public or private nonprofit hospital or public hospital authority, public--24or private elementary or secondary school, a public or private nonprofit--25educational institution, state correctional institution including a privately--26constructed correctional institution contracted for state use and ownership,--27that would be exempt from taxation under the provisions of this act if--28purchased directly by such hospital or public hospital authority, school,--29educational institution or a state correctional institution; and all sales of--30tangible personal property or services purchased by a contractor for the--31purpose of constructing, equipping, reconstructing, maintaining, repairing,--32enlarging, furnishing or remodeling facilities for any political subdivision--33of the state or district described in subsection (s), the total cost of which is--34paid from funds of such political subdivision or district and that would be--35exempt from taxation under the provisions of this act if purchased directly--36by such political subdivision or district. Nothing in this subsection or in--37the provisions of K.S.A. 12-3418, and amendments thereto, shall be--38deemed to exempt the purchase of any construction machinery, equipment--39or tools used in the constructing, equipping, reconstructing, maintaining,--40repairing, enlarging, furnishing or remodeling facilities for any political--41subdivision of the state or any such district. As used in this subsection,--42K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a--43political subdivision" shall mean general tax revenues, the proceeds of any--1bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the--2purpose of constructing, equipping, reconstructing, repairing, enlarging,--3furnishing or remodeling facilities that are to be leased to the donor. When--4any political subdivision of the state, district described in subsection (s),--5public or private nonprofit hospital or public hospital authority, public or--6private elementary or secondary school, public or private nonprofit--7educational institution, state correctional institution including a privately--8constructed correctional institution contracted for state use and ownership--9shall contract for the purpose of constructing, equipping, reconstructing,--10maintaining, repairing, enlarging, furnishing or remodeling facilities, it--11shall obtain from the state and furnish to the contractor an exemption--12certificate for the project involved, and the contractor may purchase--13materials for incorporation in such project. The contractor shall furnish the--14number of such certificate to all suppliers from whom such purchases are--15made, and such suppliers shall execute invoices covering the same bearing--16the number of such certificate. Upon completion of the project the--17contractor shall furnish to the political subdivision, district described in--18subsection (s), hospital or public hospital authority, school, educational--19institution or department of corrections concerned a sworn statement, on a--20form to be provided by the director of taxation, that all purchases so made--21were entitled to exemption under this subsection. As an alternative to the--22foregoing procedure, any such contracting entity may apply to the--23secretary of revenue for agent status for the sole purpose of issuing and--24furnishing project exemption certificates to contractors pursuant to rules--25and regulations adopted by the secretary establishing conditions and--26standards for the granting and maintaining of such status. All invoices--27shall be held by the contractor for a period of five years and shall be--28subject to audit by the director of taxation. If any materials purchased--29under such a certificate are found not to have been incorporated in the--30building or other project or not to have been returned for credit or the sales--31or compensating tax otherwise imposed upon such materials that will not--32be so incorporated in the building or other project reported and paid by--33such contractor to the director of taxation not later than the 20th day of the--34month following the close of the month in which it shall be determined--35that such materials will not be used for the purpose for which such--36certificate was issued, the political subdivision, district described in--37subsection (s), hospital or public hospital authority, school, educational--38institution or the contractor contracting with the department of corrections--39for a correctional institution concerned shall be liable for tax on all--40materials purchased for the project, and upon payment thereof it may--41recover the same from the contractor together with reasonable attorney--42fees. Any contractor or any agent, employee or subcontractor thereof, who--43shall use or otherwise dispose of any materials purchased under such a--1certificate for any purpose other than that for which such a certificate is--2issued without the payment of the sales or compensating tax otherwise--3imposed upon such materials, shall be guilty of a misdemeanor and, upon--4conviction therefor, shall be subject to the penalties provided for in K.S.A.--579-3615(h), and amendments thereto;--6(e) all sales of tangible personal property or services purchased by a--7contractor for the erection, repair or enlargement of buildings or other--8projects for the government of the United States, its agencies or--9instrumentalities, that would be exempt from taxation if purchased directly--10by the government of the United States, its agencies or instrumentalities.--11When the government of the United States, its agencies or--12instrumentalities shall contract for the erection, repair, or enlargement of--13any building or other project, it shall obtain from the state and furnish to--14the contractor an exemption certificate for the project involved, and the--15contractor may purchase materials for incorporation in such project. The--16contractor shall furnish the number of such certificates to all suppliers--17from whom such purchases are made, and such suppliers shall execute--18invoices covering the same bearing the number of such certificate. Upon--19completion of the project the contractor shall furnish to the government of--20the United States, its agencies or instrumentalities concerned a sworn--21statement, on a form to be provided by the director of taxation, that all--22purchases so made were entitled to exemption under this subsection. As an--23alternative to the foregoing procedure, any such contracting entity may--24apply to the secretary of revenue for agent status for the sole purpose of--25issuing and furnishing project exemption certificates to contractors--26pursuant to rules and regulations adopted by the secretary establishing--27conditions and standards for the granting and maintaining of such status.--28All invoices shall be held by the contractor for a period of five years and--29shall be subject to audit by the director of taxation. Any contractor or any--30agent, employee or subcontractor thereof, who shall use or otherwise--31dispose of any materials purchased under such a certificate for any purpose--32other than that for which such a certificate is issued without the payment--33of the sales or compensating tax otherwise imposed upon such materials,--34shall be guilty of a misdemeanor and, upon conviction therefor, shall be--35subject to the penalties provided for in K.S.A. 79-3615(h), and--36amendments thereto;--37(f) tangible personal property purchased by a railroad or public utility--38for consumption or movement directly and immediately in interstate--39commerce;--40(g) sales of aircraft including remanufactured and modified aircraft--41sold to persons using directly or through an authorized agent such aircraft--42as certified or licensed carriers of persons or property in interstate or--43foreign commerce under authority of the laws of the United States or any--1foreign government or sold to any foreign government or agency or--2instrumentality of such foreign government and all sales of aircraft for use--3outside of the United States and sales of aircraft repair, modification and--4replacement parts and sales of services employed in the remanufacture,--5modification and repair of aircraft;--6(h) all rentals of nonsectarian textbooks by public or private--7elementary or secondary schools;--8(i) the lease or rental of all films, records, tapes, or any type of sound--9or picture transcriptions used by motion picture exhibitors;--10(j) meals served without charge or food used in the preparation of--11such meals to employees of any restaurant, eating house, dining car, hotel,--12drugstore or other place where meals or drinks are regularly sold to the--13public if such employees' duties are related to the furnishing or sale of--14such meals or drinks;--15(k) any motor vehicle, semitrailer or pole trailer, as such terms are--16defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and--17delivered in this state to a bona fide resident of another state, which motor--18vehicle, semitrailer, pole trailer or aircraft is not to be registered or based--19in this state and which vehicle, semitrailer, pole trailer or aircraft will not--20remain in this state more than 10 days;--21(l) all isolated or occasional sales of tangible personal property,--22services, substances or things, except isolated or occasional sale of motor--23vehicles specifically taxed under the provisions of K.S.A. 79-3603(o), and--24amendments thereto;--25(m) all sales of tangible personal property that become an ingredient--26or component part of tangible personal property or services produced,--27manufactured or compounded for ultimate sale at retail within or without--28the state of Kansas; and any such producer, manufacturer or compounder--29may obtain from the director of taxation and furnish to the supplier an--30exemption certificate number for tangible personal property for use as an--31ingredient or component part of the property or services produced,--32manufactured or compounded;--33(n) all sales of tangible personal property that is consumed in the--34production, manufacture, processing, mining, drilling, refining or--35compounding of tangible personal property, the treating of by-products or--36wastes derived from any such production process, the providing of--37services or the irrigation of crops for ultimate sale at retail within or--38without the state of Kansas; and any purchaser of such property may--39obtain from the director of taxation and furnish to the supplier an--40exemption certificate number for tangible personal property for--41consumption in such production, manufacture, processing, mining,--42drilling, refining, compounding, treating, irrigation and in providing such--43services;--1(o) all sales of animals, fowl and aquatic plants and animals, the--2primary purpose of which is use in agriculture or aquaculture, as defined in--3K.S.A. 47-1901, and amendments thereto, the production of food for--4human consumption, the production of animal, dairy, poultry or aquatic--5plant and animal products, fiber or fur, or the production of offspring for--6use for any such purpose or purposes;--7(p) all sales of drugs dispensed pursuant to a prescription order by a--8licensed practitioner or a mid-level practitioner as defined by K.S.A. 65---91626, and amendments thereto. As used in this subsection, "drug" means a--10compound, substance or preparation and any component of a compound,--11substance or preparation, other than food and food ingredients, dietary--12supplements or alcoholic beverages, recognized in the official United--13States pharmacopeia, official homeopathic pharmacopoeia of the United--14States or official national formulary, and supplement to any of them,--15intended for use in the diagnosis, cure, mitigation, treatment or prevention--16of disease or intended to affect the structure or any function of the body,--17except that for taxable years commencing after December 31, 2013, this--18subsection shall not apply to any sales of drugs used in the performance or--19induction of an abortion, as defined in K.S.A. 65-6701, and amendments--20thereto;--21(q) all sales of insulin dispensed by a person licensed by the state--22board of pharmacy to a person for treatment of diabetes at the direction of--23a person licensed to practice medicine by the state board of healing arts;--24(r) all sales of oxygen delivery equipment, kidney dialysis equipment,--25enteral feeding systems, prosthetic devices and mobility enhancing--26equipment prescribed in writing by a person licensed to practice the--27healing arts, dentistry or optometry, and in addition to such sales, all sales--28of hearing aids, as defined by K.S.A. 74-5807(c), and amendments thereto,--29and repair and replacement parts therefor, including batteries, by a person--30licensed in the practice of dispensing and fitting hearing aids pursuant to--31the provisions of K.S.A. 74-5808, and amendments thereto. For the--32purposes of this subsection: (1) "Mobility enhancing equipment" means--33equipment including repair and replacement parts to same, but does not--34include durable medical equipment, which is primarily and customarily--35used to provide or increase the ability to move from one place to another--36and which is appropriate for use either in a home or a motor vehicle; is not--37generally used by persons with normal mobility; and does not include any--38motor vehicle or equipment on a motor vehicle normally provided by a--39motor vehicle manufacturer; and (2) "prosthetic device" means a--40replacement, corrective or supportive device including repair and--41replacement parts for same worn on or in the body to artificially replace a--42missing portion of the body, prevent or correct physical deformity or--43malfunction or support a weak or deformed portion of the body;--1(s) except as provided in K.S.A. 82a-2101, and amendments thereto,--2all sales of tangible personal property or services purchased directly or--3indirectly by a groundwater management district organized or operating--4under the authority of K.S.A. 82a-1020 et seq., and amendments thereto,--5by a rural water district organized or operating under the authority of--6K.S.A. 82a-612, and amendments thereto, or by a water supply district--7organized or operating under the authority of K.S.A. 19-3501 et seq., 19---83522 et seq. or 19-3545, and amendments thereto, which property or--9services are used in the construction activities, operation or maintenance of--10the district;--11(t) all sales of farm machinery and equipment or aquaculture--12machinery and equipment, repair and replacement parts therefor and--13services performed in the repair and maintenance of such machinery and--14equipment. For the purposes of this subsection the term "farm machinery--15and equipment or aquaculture machinery and equipment" shall include a--16work-site utility vehicle, as defined in K.S.A. 8-126, and amendments--17thereto, and is equipped with a bed or cargo box for hauling materials, and--18shall also include machinery and equipment used in the operation of--19Christmas tree farming but shall not include any passenger vehicle, truck,--20truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as--21such terms are defined by K.S.A. 8-126, and amendments thereto. "Farm--22machinery and equipment" includes precision farming equipment that is--23portable or is installed or purchased to be installed on farm machinery and--24equipment. "Precision farming equipment" includes the following items--25used only in computer-assisted farming, ranching or aquaculture--26production operations: Soil testing sensors, yield monitors, computers,--27monitors, software, global positioning and mapping systems, guiding--28systems, modems, data communications equipment and any necessary--29mounting hardware, wiring and antennas. Each purchaser of farm--30machinery and equipment or aquaculture machinery and equipment--31exempted herein must certify in writing on the copy of the invoice or sales--32ticket to be retained by the seller that the farm machinery and equipment--33or aquaculture machinery and equipment purchased will be used only in--34farming, ranching or aquaculture production. Farming or ranching shall--35include the operation of a feedlot and farm and ranch work for hire and the--36operation of a nursery;--37(u) all leases or rentals of tangible personal property used as a--38dwelling if such tangible personal property is leased or rented for a period--39of more than 28 consecutive days;--40(v) all sales of tangible personal property to any contractor for use in--41preparing meals for delivery to homebound elderly persons over 60 years--42of age and to homebound disabled persons or to be served at a group---43sitting at a location outside of the home to otherwise homebound elderly--1persons over 60 years of age and to otherwise homebound disabled--2persons, as all or part of any food service project funded in whole or in--3part by government or as part of a private nonprofit food service project--4available to all such elderly or disabled persons residing within an area of--5service designated by the private nonprofit organization, and all sales of--6tangible personal property for use in preparing meals for consumption by--7indigent or homeless individuals whether or not such meals are consumed--8at a place designated for such purpose, and all sales of food products by or--9on behalf of any such contractor or organization for any such purpose;--10(w) all sales of natural gas, electricity, heat and water delivered--11through mains, lines or pipes: (1) To residential premises for--12noncommercial use by the occupant of such premises; (2) for agricultural--13use and also, for such use, all sales of propane gas; (3) for use in the--14severing of oil; and (4) to any property which is exempt from property--15taxation pursuant to K.S.A. 79-201b, Second through Sixth. As used in this--16paragraph, "severing" means the same as defined in K.S.A. 79-4216(k),--17and amendments thereto. For all sales of natural gas, electricity and heat--18delivered through mains, lines or pipes pursuant to the provisions of--19subsection (w)(1) and (w)(2), the provisions of this subsection shall expire--20on December 31, 2005;--21(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources--22for the production of heat or lighting for noncommercial use of an--23occupant of residential premises occurring prior to January 1, 2006;--24(y) all sales of materials and services used in the repairing, servicing,--25altering, maintaining, manufacturing, remanufacturing, or modification of--26railroad rolling stock for use in interstate or foreign commerce under--27authority of the laws of the United States;--28(z) all sales of tangible personal property and services purchased--29directly by a port authority or by a contractor therefor as provided by the--30provisions of K.S.A. 12-3418, and amendments thereto;--31(aa) all sales of materials and services applied to equipment that is--32transported into the state from without the state for repair, service,--33alteration, maintenance, remanufacture or modification and that is--34subsequently transported outside the state for use in the transmission of--35liquids or natural gas by means of pipeline in interstate or foreign--36commerce under authority of the laws of the United States;--37(bb) all sales of used mobile homes or manufactured homes. As used--38in this subsection: (1) "Mobile homes" and "manufactured homes" mean--39the same as defined in K.S.A. 58-4202, and amendments thereto; and (2)--40"sales of used mobile homes or manufactured homes" means sales other--41than the original retail sale thereof;--42(cc) all sales of tangible personal property or services purchased prior--43to January 1, 2012, except as otherwise provided, for the purpose of and in--1conjunction with constructing, reconstructing, enlarging or remodeling a--2business or retail business that meets the requirements established in--3K.S.A. 74-50,115, and amendments thereto, and the sale and installation of--4machinery and equipment purchased for installation at any such business--5or retail business, and all sales of tangible personal property or services--6purchased on or after January 1, 2012, for the purpose of and in--7conjunction with constructing, reconstructing, enlarging or remodeling a--8business that meets the requirements established in K.S.A. 74-50,115(e),--9and amendments thereto, and the sale and installation of machinery and--10equipment purchased for installation at any such business. When a person--11shall contract for the construction, reconstruction, enlargement or--12remodeling of any such business or retail business, such person shall--13obtain from the state and furnish to the contractor an exemption certificate--14for the project involved, and the contractor may purchase materials,--15machinery and equipment for incorporation in such project. The contractor--16shall furnish the number of such certificates to all suppliers from whom--17such purchases are made, and such suppliers shall execute invoices--18covering the same bearing the number of such certificate. Upon--19completion of the project the contractor shall furnish to the owner of the--20business or retail business a sworn statement, on a form to be provided by--21the director of taxation, that all purchases so made were entitled to--22exemption under this subsection. All invoices shall be held by the--23contractor for a period of five years and shall be subject to audit by the--24director of taxation. Any contractor or any agent, employee or--25subcontractor thereof, who shall use or otherwise dispose of any materials,--26machinery or equipment purchased under such a certificate for any--27purpose other than that for which such a certificate is issued without the--28payment of the sales or compensating tax otherwise imposed thereon, shall--29be guilty of a misdemeanor and, upon conviction therefor, shall be subject--30to the penalties provided for in K.S.A. 79-3615(h), and amendments--31thereto. As used in this subsection, "business" and "retail business" mean--32the same as defined in K.S.A. 74-50,114, and amendments thereto. Project--33exemption certificates that have been previously issued under this--34subsection by the department of revenue pursuant to K.S.A. 74-50,115,--35and amendments thereto, but not including K.S.A. 74-50,115(e), and--36amendments thereto, prior to January 1, 2012, and have not expired will be--37effective for the term of the project or two years from the effective date of--38the certificate, whichever occurs earlier. Project exemption certificates that--39are submitted to the department of revenue prior to January 1, 2012, and--40are found to qualify will be issued a project exemption certificate that will--41be effective for a two-year period or for the term of the project, whichever--42occurs earlier;--43(dd) all sales of tangible personal property purchased with food--1stamps issued by the United States department of agriculture;--2(ee) all sales of lottery tickets and shares made as part of a lottery--3operated by the state of Kansas;--4(ff) on and after July 1, 1988, all sales of new mobile homes or--5manufactured homes to the extent of 40% of the gross receipts, determined--6without regard to any trade-in allowance, received from such sale. As used--7in this subsection, "mobile homes" and "manufactured homes" mean the--8same as defined in K.S.A. 58-4202, and amendments thereto;--9(gg) all sales of tangible personal property purchased in accordance--10with vouchers issued pursuant to the federal special supplemental food--11program for women, infants and children;--12(hh) all sales of medical supplies and equipment, including durable--13medical equipment, purchased directly by a nonprofit skilled nursing home--14or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,--15and amendments thereto, for the purpose of providing medical services to--16residents thereof. This exemption shall not apply to tangible personal--17property customarily used for human habitation purposes. As used in this--18subsection, "durable medical equipment" means equipment including--19repair and replacement parts for such equipment, that can withstand--20repeated use, is primarily and customarily used to serve a medical purpose,--21generally is not useful to a person in the absence of illness or injury and is--22not worn in or on the body, but does not include mobility enhancing--23equipment as defined in subsection (r), oxygen delivery equipment, kidney--24dialysis equipment or enteral feeding systems;--25(ii) all sales of tangible personal property purchased directly by a--26nonprofit organization for nonsectarian comprehensive multidiscipline--27youth development programs and activities provided or sponsored by such--28organization, and all sales of tangible personal property by or on behalf of--29any such organization. This exemption shall not apply to tangible personal--30property customarily used for human habitation purposes;--31(jj) all sales of tangible personal property or services, including the--32renting and leasing of tangible personal property, purchased directly on--33behalf of a community-based facility for people with intellectual disability--34or mental health center organized pursuant to K.S.A. 19-4001 et seq., and--35amendments thereto, and licensed in accordance with the provisions of--36K.S.A. 39-2001 et seq., and amendments thereto, and all sales of tangible--37personal property or services purchased by contractors during the time--38period from July, 2003, through June, 2006, for the purpose of--39constructing, equipping, maintaining or furnishing a new facility for a--40community-based facility for people with intellectual disability or mental--41health center located in Riverton, Cherokee County, Kansas, that would--42have been eligible for sales tax exemption pursuant to this subsection if--43purchased directly by such facility or center. This exemption shall not--1apply to tangible personal property customarily used for human habitation--2purposes;--3(kk) (1) (A) all sales of machinery and equipment that are used in this--4state as an integral or essential part of an integrated production operation--5by a manufacturing or processing plant or facility;--6(B) all sales of installation, repair and maintenance services--7performed on such machinery and equipment; and--8(C) all sales of repair and replacement parts and accessories--9purchased for such machinery and equipment.--10(2) For purposes of this subsection:--11(A) "Integrated production operation" means an integrated series of--12operations engaged in at a manufacturing or processing plant or facility to--13process, transform or convert tangible personal property by physical,--14chemical or other means into a different form, composition or character--15from that in which it originally existed. Integrated production operations--16shall include: (i) Production line operations, including packaging--17operations; (ii) preproduction operations to handle, store and treat raw--18materials; (iii) post production handling, storage, warehousing and--19distribution operations; and (iv) waste, pollution and environmental--20control operations, if any;--21(B) "production line" means the assemblage of machinery and--22equipment at a manufacturing or processing plant or facility where the--23actual transformation or processing of tangible personal property occurs;--24(C) "manufacturing or processing plant or facility" means a single,--25fixed location owned or controlled by a manufacturing or processing--26business that consists of one or more structures or buildings in a--27contiguous area where integrated production operations are conducted to--28manufacture or process tangible personal property to be ultimately sold at--29retail. Such term shall not include any facility primarily operated for the--30purpose of conveying or assisting in the conveyance of natural gas,--31electricity, oil or water. A business may operate one or more manufacturing--32or processing plants or facilities at different locations to manufacture or--33process a single product of tangible personal property to be ultimately sold--34at retail;--35(D) "manufacturing or processing business" means a business that--36utilizes an integrated production operation to manufacture, process,--37fabricate, finish or assemble items for wholesale and retail distribution as--38part of what is commonly regarded by the general public as an industrial--39manufacturing or processing operation or an agricultural commodity--40processing operation. (i) Industrial manufacturing or processing operations--41include, by way of illustration but not of limitation, the fabrication of--42automobiles, airplanes, machinery or transportation equipment, the--43fabrication of metal, plastic, wood or paper products, electricity power--1generation, water treatment, petroleum refining, chemical production,--2wholesale bottling, newspaper printing, ready mixed concrete production,--3and the remanufacturing of used parts for wholesale or retail sale. Such--4processing operations shall include operations at an oil well, gas well,--5mine or other excavation site where the oil, gas, minerals, coal, clay, stone,--6sand or gravel that has been extracted from the earth is cleaned, separated,--7crushed, ground, milled, screened, washed or otherwise treated or prepared--8before its transmission to a refinery or before any other wholesale or retail--9distribution. (ii) Agricultural commodity processing operations include, by--10way of illustration but not of limitation, meat packing, poultry slaughtering--11and dressing, processing and packaging farm and dairy products in sealed--12containers for wholesale and retail distribution, feed grinding, grain--13milling, frozen food processing, and grain handling, cleaning, blending,--14fumigation, drying and aeration operations engaged in by grain elevators--15or other grain storage facilities. (iii) Manufacturing or processing--16businesses do not include, by way of illustration but not of limitation,--17nonindustrial businesses whose operations are primarily retail and that--18produce or process tangible personal property as an incidental part of--19conducting the retail business, such as retailers who bake, cook or prepare--20food products in the regular course of their retail trade, grocery stores,--21meat lockers and meat markets that butcher or dress livestock or poultry in--22the regular course of their retail trade, contractors who alter, service, repair--23or improve real property, and retail businesses that clean, service or--24refurbish and repair tangible personal property for its owner;--25(E) "repair and replacement parts and accessories" means all parts--26and accessories for exempt machinery and equipment, including, but not--27limited to, dies, jigs, molds, patterns and safety devices that are attached to--28exempt machinery or that are otherwise used in production, and parts and--29accessories that require periodic replacement such as belts, drill bits,--30grinding wheels, grinding balls, cutting bars, saws, refractory brick and--31other refractory items for exempt kiln equipment used in production--32operations;--33(F) "primary" or "primarily" mean more than 50% of the time.--34(3) For purposes of this subsection, machinery and equipment shall--35be deemed to be used as an integral or essential part of an integrated--36production operation when used to:--37(A) Receive, transport, convey, handle, treat or store raw materials in--38preparation of its placement on the production line;--39(B) transport, convey, handle or store the property undergoing--40manufacturing or processing at any point from the beginning of the--41production line through any warehousing or distribution operation of the--42final product that occurs at the plant or facility;--43(C) act upon, effect, promote or otherwise facilitate a physical change--1to the property undergoing manufacturing or processing;--2(D) guide, control or direct the movement of property undergoing--3manufacturing or processing;--4(E) test or measure raw materials, the property undergoing--5manufacturing or processing or the finished product, as a necessary part of--6the manufacturer's integrated production operations;--7(F) plan, manage, control or record the receipt and flow of inventories--8of raw materials, consumables and component parts, the flow of the--9property undergoing manufacturing or processing and the management of--10inventories of the finished product;--11(G) produce energy for, lubricate, control the operating of or--12otherwise enable the functioning of other production machinery and--13equipment and the continuation of production operations;--14(H) package the property being manufactured or processed in a--15container or wrapping in which such property is normally sold or--16transported;--17(I) transmit or transport electricity, coke, gas, water, steam or similar--18substances used in production operations from the point of generation, if--19produced by the manufacturer or processor at the plant site, to that--20manufacturer's production operation; or, if purchased or delivered from--21off-site, from the point where the substance enters the site of the plant or--22facility to that manufacturer's production operations;--23(J) cool, heat, filter, refine or otherwise treat water, steam, acid, oil,--24solvents or other substances that are used in production operations;--25(K) provide and control an environment required to maintain certain--26levels of air quality, humidity or temperature in special and limited areas--27of the plant or facility, where such regulation of temperature or humidity is--28part of and essential to the production process;--29(L) treat, transport or store waste or other byproducts of production--30operations at the plant or facility; or--31(M) control pollution at the plant or facility where the pollution is--32produced by the manufacturing or processing operation.--33(4) The following machinery, equipment and materials shall be--34deemed to be exempt even though it may not otherwise qualify as--35machinery and equipment used as an integral or essential part of an--36integrated production operation: (A) Computers and related peripheral--37equipment that are utilized by a manufacturing or processing business for--38engineering of the finished product or for research and development or--39product design; (B) machinery and equipment that is utilized by a--40manufacturing or processing business to manufacture or rebuild tangible--41personal property that is used in manufacturing or processing operations,--42including tools, dies, molds, forms and other parts of qualifying machinery--43and equipment; (C) portable plants for aggregate concrete, bulk cement--1and asphalt including cement mixing drums to be attached to a motor--2vehicle; (D) industrial fixtures, devices, support facilities and special--3foundations necessary for manufacturing and production operations, and--4materials and other tangible personal property sold for the purpose of--5fabricating such fixtures, devices, facilities and foundations. An exemption--6certificate for such purchases shall be signed by the manufacturer or--7processor. If the fabricator purchases such material, the fabricator shall--8also sign the exemption certificate; (E) a manufacturing or processing--9business' laboratory equipment that is not located at the plant or facility,--10but that would otherwise qualify for exemption under subsection (3)(E);--11(F) all machinery and equipment used in surface mining activities as--12described in K.S.A. 49-601 et seq., and amendments thereto, beginning--13from the time a reclamation plan is filed to the acceptance of the--14completed final site reclamation.--15(5) "Machinery and equipment used as an integral or essential part of--16an integrated production operation" shall not include:--17(A) Machinery and equipment used for nonproduction purposes,--18including, but not limited to, machinery and equipment used for plant--19security, fire prevention, first aid, accounting, administration, record--20keeping, advertising, marketing, sales or other related activities, plant--21cleaning, plant communications and employee work scheduling;--22(B) machinery, equipment and tools used primarily in maintaining--23and repairing any type of machinery and equipment or the building and--24plant;--25(C) transportation, transmission and distribution equipment not--26primarily used in a production, warehousing or material handling--27operation at the plant or facility, including the means of conveyance of--28natural gas, electricity, oil or water, and equipment related thereto, located--29outside the plant or facility;--30(D) office machines and equipment including computers and related--31peripheral equipment not used directly and primarily to control or measure--32the manufacturing process;--33(E) furniture and other furnishings;--34(F) buildings, other than exempt machinery and equipment that is--35permanently affixed to or becomes a physical part of the building, and any--36other part of real estate that is not otherwise exempt;--37(G) building fixtures that are not integral to the manufacturing--38operation, such as utility systems for heating, ventilation, air conditioning,--39communications, plumbing or electrical;--40(H) machinery and equipment used for general plant heating, cooling--41and lighting;--42(I) motor vehicles that are registered for operation on public--43highways; or--1(J) employee apparel, except safety and protective apparel that is--2purchased by an employer and furnished gratuitously to employees who--3are involved in production or research activities.--4(6) Paragraphs (3) and (5) shall not be construed as exclusive listings--5of the machinery and equipment that qualify or do not qualify as an--6integral or essential part of an integrated production operation. When--7machinery or equipment is used as an integral or essential part of--8production operations part of the time and for nonproduction purposes at--9other times, the primary use of the machinery or equipment shall--10determine whether or not such machinery or equipment qualifies for--11exemption.--12(7) The secretary of revenue shall adopt rules and regulations--13necessary to administer the provisions of this subsection;--14(ll) all sales of educational materials purchased for distribution to the--15public at no charge by a nonprofit corporation organized for the purpose of--16encouraging, fostering and conducting programs for the improvement of--17public health, except that for taxable years commencing after December--1831, 2013, this subsection shall not apply to any sales of such materials--19purchased by a nonprofit corporation which performs any abortion, as--20defined in K.S.A. 65-6701, and amendments thereto;--21(mm) all sales of seeds and tree seedlings; fertilizers, insecticides,--22herbicides, germicides, pesticides and fungicides; and services, purchased--23and used for the purpose of producing plants in order to prevent soil--24erosion on land devoted to agricultural use;--25(nn) except as otherwise provided in this act, all sales of services--26rendered by an advertising agency or licensed broadcast station or any--27member, agent or employee thereof;--28(oo) all sales of tangible personal property purchased by a community--29action group or agency for the exclusive purpose of repairing or--30weatherizing housing occupied by low-income individuals;--31(pp) all sales of drill bits and explosives actually utilized in the--32exploration and production of oil or gas;--33(qq) all sales of tangible personal property and services purchased by--34a nonprofit museum or historical society or any combination thereof,--35including a nonprofit organization that is organized for the purpose of--36stimulating public interest in the exploration of space by providing--37educational information, exhibits and experiences, that is exempt from--38federal income taxation pursuant to section 501(c)(3) of the federal--39internal revenue code of 1986;--40(rr) all sales of tangible personal property that will admit the--41purchaser thereof to any annual event sponsored by a nonprofit--42organization that is exempt from federal income taxation pursuant to--43section 501(c)(3) of the federal internal revenue code of 1986, except that--1for taxable years commencing after December 31, 2013, this subsection--2shall not apply to any sales of such tangible personal property purchased--3by a nonprofit organization which performs any abortion, as defined in--4K.S.A. 65-6701, and amendments thereto;--5(ss) all sales of tangible personal property and services purchased by--6a public broadcasting station licensed by the federal communications--7commission as a noncommercial educational television or radio station;--8(tt) all sales of tangible personal property and services purchased by--9or on behalf of a not-for-profit corporation that is exempt from federal--10income taxation pursuant to section 501(c)(3) of the federal internal--11revenue code of 1986, for the sole purpose of constructing a Kansas--12Korean War memorial;--13(uu) all sales of tangible personal property and services purchased by--14or on behalf of any rural volunteer fire-fighting organization for use--15exclusively in the performance of its duties and functions;--16(vv) all sales of tangible personal property purchased by any of the--17following organizations that are exempt from federal income taxation--18pursuant to section 501(c)(3) of the federal internal revenue code of 1986,--19for the following purposes, and all sales of any such property by or on--20behalf of any such organization for any such purpose:--21(1) The American heart association, Kansas affiliate, inc. for the--22purposes of providing education, training, certification in emergency--23cardiac care, research and other related services to reduce disability and--24death from cardiovascular diseases and stroke;--25(2) the Kansas alliance for the mentally ill, inc. for the purpose of--26advocacy for persons with mental illness and to education, research and--27support for their families;--28(3) the Kansas mental illness awareness council for the purposes of--29advocacy for persons who are mentally ill and for education, research and--30support for them and their families;--31(4) the American diabetes association Kansas affiliate, inc. for the--32purpose of eliminating diabetes through medical research, public education--33focusing on disease prevention and education, patient education including--34information on coping with diabetes, and professional education and--35training;--36(5) the American lung association of Kansas, inc. for the purpose of--37eliminating all lung diseases through medical research, public education--38including information on coping with lung diseases, professional education--39and training related to lung disease and other related services to reduce the--40incidence of disability and death due to lung disease;--41(6) the Kansas chapters of the Alzheimer's disease and related--42disorders association, inc. for the purpose of providing assistance and--43support to persons in Kansas with Alzheimer's disease, and their families--1and caregivers;--2(7) the Kansas chapters of the Parkinson's disease association for the--3purpose of eliminating Parkinson's disease through medical research and--4public and professional education related to such disease;--5(8) the national kidney foundation of Kansas and western Missouri--6for the purpose of eliminating kidney disease through medical research--7and public and private education related to such disease;--8(9) the heartstrings community foundation for the purpose of--9providing training, employment and activities for adults with--10developmental disabilities;--11(10) the cystic fibrosis foundation, heart of America chapter, for the--12purposes of assuring the development of the means to cure and control--13cystic fibrosis and improving the quality of life for those with the disease;--14(11) the spina bifida association of Kansas for the purpose of--15providing financial, educational and practical aid to families and--16individuals with spina bifida. Such aid includes, but is not limited to,--17funding for medical devices, counseling and medical educational--18opportunities;--19(12) the CHWC, Inc., for the purpose of rebuilding urban core--20neighborhoods through the construction of new homes, acquiring and--21renovating existing homes and other related activities, and promoting--22economic development in such neighborhoods;--23(13) the cross-lines cooperative council for the purpose of providing--24social services to low income individuals and families;--25(14) the dreams work, inc., for the purpose of providing young adult--26day services to individuals with developmental disabilities and assisting--27families in avoiding institutional or nursing home care for a--28developmentally disabled member of their family;--29(15) the KSDS, Inc., for the purpose of promoting the independence--30and inclusion of people with disabilities as fully participating and--31contributing members of their communities and society through the--32training and providing of guide and service dogs to people with--33disabilities, and providing disability education and awareness to the--34general public;--35(16) the lyme association of greater Kansas City, Inc., for the purpose--36of providing support to persons with lyme disease and public education--37relating to the prevention, treatment and cure of lyme disease;--38(17) the dream factory, inc., for the purpose of granting the dreams of--39children with critical and chronic illnesses;--40(18) the Ottawa Suzuki strings, inc., for the purpose of providing--41students and families with education and resources necessary to enable--42each child to develop fine character and musical ability to the fullest--43potential;--1(19) the international association of lions clubs for the purpose of--2creating and fostering a spirit of understanding among all people for--3humanitarian needs by providing voluntary services through community--4involvement and international cooperation;--5(20) the Johnson county young matrons, inc., for the purpose of--6promoting a positive future for members of the community through--7volunteerism, financial support and education through the efforts of an all--8volunteer organization;--9(21) the American cancer society, inc., for the purpose of eliminating--10cancer as a major health problem by preventing cancer, saving lives and--11diminishing suffering from cancer, through research, education, advocacy--12and service;--13(22) the community services of Shawnee, inc., for the purpose of--14providing food and clothing to those in need;--15(23) the angel babies association, for the purpose of providing--16assistance, support and items of necessity to teenage mothers and their--17babies; and--18(24) the Kansas fairgrounds foundation for the purpose of the--19preservation, renovation and beautification of the Kansas state fairgrounds;--20(ww) all sales of tangible personal property purchased by the habitat--21for humanity for the exclusive use of being incorporated within a housing--22project constructed by such organization;--23(xx) all sales of tangible personal property and services purchased by--24a nonprofit zoo that is exempt from federal income taxation pursuant to--25section 501(c)(3) of the federal internal revenue code of 1986, or on behalf--26of such zoo by an entity itself exempt from federal income taxation--27pursuant to section 501(c)(3) of the federal internal revenue code of 1986--28contracted with to operate such zoo and all sales of tangible personal--29property or services purchased by a contractor for the purpose of--30constructing, equipping, reconstructing, maintaining, repairing, enlarging,--31furnishing or remodeling facilities for any nonprofit zoo that would be--32exempt from taxation under the provisions of this section if purchased--33directly by such nonprofit zoo or the entity operating such zoo. Nothing in--34this subsection shall be deemed to exempt the purchase of any construction--35machinery, equipment or tools used in the constructing, equipping,--36reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--37facilities for any nonprofit zoo. When any nonprofit zoo shall contract for--38the purpose of constructing, equipping, reconstructing, maintaining,--39repairing, enlarging, furnishing or remodeling facilities, it shall obtain--40from the state and furnish to the contractor an exemption certificate for the--41project involved, and the contractor may purchase materials for--42incorporation in such project. The contractor shall furnish the number of--43such certificate to all suppliers from whom such purchases are made, and--1such suppliers shall execute invoices covering the same bearing the--2number of such certificate. Upon completion of the project the contractor--3shall furnish to the nonprofit zoo concerned a sworn statement, on a form--4to be provided by the director of taxation, that all purchases so made were--5entitled to exemption under this subsection. All invoices shall be held by--6the contractor for a period of five years and shall be subject to audit by the--7director of taxation. If any materials purchased under such a certificate are--8found not to have been incorporated in the building or other project or not--9to have been returned for credit or the sales or compensating tax otherwise--10imposed upon such materials that will not be so incorporated in the--11building or other project reported and paid by such contractor to the--12director of taxation not later than the 20th day of the month following the--13close of the month in which it shall be determined that such materials will--14not be used for the purpose for which such certificate was issued, the--15nonprofit zoo concerned shall be liable for tax on all materials purchased--16for the project, and upon payment thereof it may recover the same from--17the contractor together with reasonable attorney fees. Any contractor or--18any agent, employee or subcontractor thereof, who shall use or otherwise--19dispose of any materials purchased under such a certificate for any purpose--20other than that for which such a certificate is issued without the payment--21of the sales or compensating tax otherwise imposed upon such materials,--22shall be guilty of a misdemeanor and, upon conviction therefor, shall be--23subject to the penalties provided for in K.S.A. 79-3615(h), and--24amendments thereto;--25(yy) all sales of tangible personal property and services purchased by--26a parent-teacher association or organization, and all sales of tangible--27personal property by or on behalf of such association or organization;--28(zz) all sales of machinery and equipment purchased by over-the-air,--29free access radio or television station that is used directly and primarily for--30the purpose of producing a broadcast signal or is such that the failure of--31the machinery or equipment to operate would cause broadcasting to cease.--32For purposes of this subsection, machinery and equipment shall include,--33but not be limited to, that required by rules and regulations of the federal--34communications commission, and all sales of electricity which are--35essential or necessary for the purpose of producing a broadcast signal or is--36such that the failure of the electricity would cause broadcasting to cease;--37(aaa) all sales of tangible personal property and services purchased by--38a religious organization that is exempt from federal income taxation--39pursuant to section 501(c)(3) of the federal internal revenue code, and used--40exclusively for religious purposes, and all sales of tangible personal--41property or services purchased by a contractor for the purpose of--42constructing, equipping, reconstructing, maintaining, repairing, enlarging,--43furnishing or remodeling facilities for any such organization that would be--1exempt from taxation under the provisions of this section if purchased--2directly by such organization. Nothing in this subsection shall be deemed--3to exempt the purchase of any construction machinery, equipment or tools--4used in the constructing, equipping, reconstructing, maintaining, repairing,--5enlarging, furnishing or remodeling facilities for any such organization.--6When any such organization shall contract for the purpose of constructing,--7equipping, reconstructing, maintaining, repairing, enlarging, furnishing or--8remodeling facilities, it shall obtain from the state and furnish to the--9contractor an exemption certificate for the project involved, and the--10contractor may purchase materials for incorporation in such project. The--11contractor shall furnish the number of such certificate to all suppliers from--12whom such purchases are made, and such suppliers shall execute invoices--13covering the same bearing the number of such certificate. Upon--14completion of the project the contractor shall furnish to such organization--15concerned a sworn statement, on a form to be provided by the director of--16taxation, that all purchases so made were entitled to exemption under this--17subsection. All invoices shall be held by the contractor for a period of five--18years and shall be subject to audit by the director of taxation. If any--19materials purchased under such a certificate are found not to have been--20incorporated in the building or other project or not to have been returned--21for credit or the sales or compensating tax otherwise imposed upon such--22materials that will not be so incorporated in the building or other project--23reported and paid by such contractor to the director of taxation not later--24than the 20th day of the month following the close of the month in which it--25shall be determined that such materials will not be used for the purpose for--26which such certificate was issued, such organization concerned shall be--27liable for tax on all materials purchased for the project, and upon payment--28thereof it may recover the same from the contractor together with--29reasonable attorney fees. Any contractor or any agent, employee or--30subcontractor thereof, who shall use or otherwise dispose of any materials--31purchased under such a certificate for any purpose other than that for--32which such a certificate is issued without the payment of the sales or--33compensating tax otherwise imposed upon such materials, shall be guilty--34of a misdemeanor and, upon conviction therefor, shall be subject to the--35penalties provided for in K.S.A. 79-3615(h), and amendments thereto.--36Sales tax paid on and after July 1, 1998, but prior to the effective date of--37this act upon the gross receipts received from any sale exempted by the--38amendatory provisions of this subsection shall be refunded. Each claim for--39a sales tax refund shall be verified and submitted to the director of taxation--40upon forms furnished by the director and shall be accompanied by any--41additional documentation required by the director. The director shall--42review each claim and shall refund that amount of sales tax paid as--43determined under the provisions of this subsection. All refunds shall be--1paid from the sales tax refund fund upon warrants of the director of--2accounts and reports pursuant to vouchers approved by the director or the--3director's designee;--4(bbb) all sales of food for human consumption by an organization that--5is exempt from federal income taxation pursuant to section 501(c)(3) of--6the federal internal revenue code of 1986, pursuant to a food distribution--7program that offers such food at a price below cost in exchange for the--8performance of community service by the purchaser thereof;--9(ccc) on and after July 1, 1999, all sales of tangible personal property--10and services purchased by a primary care clinic or health center the--11primary purpose of which is to provide services to medically underserved--12individuals and families, and that is exempt from federal income taxation--13pursuant to section 501(c)(3) of the federal internal revenue code, and all--14sales of tangible personal property or services purchased by a contractor--15for the purpose of constructing, equipping, reconstructing, maintaining,--16repairing, enlarging, furnishing or remodeling facilities for any such clinic--17or center that would be exempt from taxation under the provisions of this--18section if purchased directly by such clinic or center, except that for--19taxable years commencing after December 31, 2013, this subsection shall--20not apply to any sales of such tangible personal property and services--21purchased by a primary care clinic or health center which performs any--22abortion, as defined in K.S.A. 65-6701, and amendments thereto. Nothing--23in this subsection shall be deemed to exempt the purchase of any--24construction machinery, equipment or tools used in the constructing,--25equipping, reconstructing, maintaining, repairing, enlarging, furnishing or--26remodeling facilities for any such clinic or center. When any such clinic or--27center shall contract for the purpose of constructing, equipping,--28reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--29facilities, it shall obtain from the state and furnish to the contractor an--30exemption certificate for the project involved, and the contractor may--31purchase materials for incorporation in such project. The contractor shall--32furnish the number of such certificate to all suppliers from whom such--33purchases are made, and such suppliers shall execute invoices covering the--34same bearing the number of such certificate. Upon completion of the--35project the contractor shall furnish to such clinic or center concerned a--36sworn statement, on a form to be provided by the director of taxation, that--37all purchases so made were entitled to exemption under this subsection.--38All invoices shall be held by the contractor for a period of five years and--39shall be subject to audit by the director of taxation. If any materials--40purchased under such a certificate are found not to have been incorporated--41in the building or other project or not to have been returned for credit or--42the sales or compensating tax otherwise imposed upon such materials that--43will not be so incorporated in the building or other project reported and--1paid by such contractor to the director of taxation not later than the 20th--2day of the month following the close of the month in which it shall be--3determined that such materials will not be used for the purpose for which--4such certificate was issued, such clinic or center concerned shall be liable--5for tax on all materials purchased for the project, and upon payment--6thereof it may recover the same from the contractor together with--7reasonable attorney fees. Any contractor or any agent, employee or--8subcontractor thereof, who shall use or otherwise dispose of any materials--9purchased under such a certificate for any purpose other than that for--10which such a certificate is issued without the payment of the sales or--11compensating tax otherwise imposed upon such materials, shall be guilty--12of a misdemeanor and, upon conviction therefor, shall be subject to the--13penalties provided for in K.S.A. 79-3615(h), and amendments thereto;--14(ddd) on and after January 1, 1999, and before January 1, 2000, all--15sales of materials and services purchased by any class II or III railroad as--16classified by the federal surface transportation board for the construction,--17renovation, repair or replacement of class II or III railroad track and--18facilities used directly in interstate commerce. In the event any such track--19or facility for which materials and services were purchased sales tax--20exempt is not operational for five years succeeding the allowance of such--21exemption, the total amount of sales tax that would have been payable--22except for the operation of this subsection shall be recouped in accordance--23with rules and regulations adopted for such purpose by the secretary of--24revenue;--25(eee) on and after January 1, 1999, and before January 1, 2001, all--26sales of materials and services purchased for the original construction,--27reconstruction, repair or replacement of grain storage facilities, including--28railroad sidings providing access thereto;--29(fff) all sales of material handling equipment, racking systems and--30other related machinery and equipment that is used for the handling,--31movement or storage of tangible personal property in a warehouse or--32distribution facility in this state; all sales of installation, repair and--33maintenance services performed on such machinery and equipment; and--34all sales of repair and replacement parts for such machinery and--35equipment. For purposes of this subsection, a warehouse or distribution--36facility means a single, fixed location that consists of buildings or--37structures in a contiguous area where storage or distribution operations are--38conducted that are separate and apart from the business' retail operations,--39if any, and that do not otherwise qualify for exemption as occurring at a--40manufacturing or processing plant or facility. Material handling and--41storage equipment shall include aeration, dust control, cleaning, handling--42and other such equipment that is used in a public grain warehouse or other--43commercial grain storage facility, whether used for grain handling, grain--1storage, grain refining or processing, or other grain treatment operation;--2(ggg) all sales of tangible personal property and services purchased--3by or on behalf of the Kansas academy of science, which is exempt from--4federal income taxation pursuant to section 501(c)(3) of the federal--5internal revenue code of 1986, and used solely by such academy for the--6preparation, publication and dissemination of education materials;--7(hhh) all sales of tangible personal property and services purchased--8by or on behalf of all domestic violence shelters that are member agencies--9of the Kansas coalition against sexual and domestic violence;--10(iii) all sales of personal property and services purchased by an--11organization that is exempt from federal income taxation pursuant to--12section 501(c)(3) of the federal internal revenue code of 1986, and such--13personal property and services are used by any such organization in the--14collection, storage and distribution of food products to nonprofit--15organizations that distribute such food products to persons pursuant to a--16food distribution program on a charitable basis without fee or charge, and--17all sales of tangible personal property or services purchased by a--18contractor for the purpose of constructing, equipping, reconstructing,--19maintaining, repairing, enlarging, furnishing or remodeling facilities used--20for the collection and storage of such food products for any such--21organization which is exempt from federal income taxation pursuant to--22section 501(c)(3) of the federal internal revenue code of 1986, that would--23be exempt from taxation under the provisions of this section if purchased--24directly by such organization. Nothing in this subsection shall be deemed--25to exempt the purchase of any construction machinery, equipment or tools--26used in the constructing, equipping, reconstructing, maintaining, repairing,--27enlarging, furnishing or remodeling facilities for any such organization.--28When any such organization shall contract for the purpose of constructing,--29equipping, reconstructing, maintaining, repairing, enlarging, furnishing or--30remodeling facilities, it shall obtain from the state and furnish to the--31contractor an exemption certificate for the project involved, and the--32contractor may purchase materials for incorporation in such project. The--33contractor shall furnish the number of such certificate to all suppliers from--34whom such purchases are made, and such suppliers shall execute invoices--35covering the same bearing the number of such certificate. Upon--36completion of the project the contractor shall furnish to such organization--37concerned a sworn statement, on a form to be provided by the director of--38taxation, that all purchases so made were entitled to exemption under this--39subsection. All invoices shall be held by the contractor for a period of five--40years and shall be subject to audit by the director of taxation. If any--41materials purchased under such a certificate are found not to have been--42incorporated in such facilities or not to have been returned for credit or the--43sales or compensating tax otherwise imposed upon such materials that will--1not be so incorporated in such facilities reported and paid by such--2contractor to the director of taxation not later than the 20th day of the--3month following the close of the month in which it shall be determined--4that such materials will not be used for the purpose for which such--5certificate was issued, such organization concerned shall be liable for tax--6on all materials purchased for the project, and upon payment thereof it--7may recover the same from the contractor together with reasonable--8attorney fees. Any contractor or any agent, employee or subcontractor--9thereof, who shall use or otherwise dispose of any materials purchased--10under such a certificate for any purpose other than that for which such a--11certificate is issued without the payment of the sales or compensating tax--12otherwise imposed upon such materials, shall be guilty of a misdemeanor--13and, upon conviction therefor, shall be subject to the penalties provided for--14in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and after--15July 1, 2005, but prior to the effective date of this act upon the gross--16receipts received from any sale exempted by the amendatory provisions of--17this subsection shall be refunded. Each claim for a sales tax refund shall be--18verified and submitted to the director of taxation upon forms furnished by--19the director and shall be accompanied by any additional documentation--20required by the director. The director shall review each claim and shall--21refund that amount of sales tax paid as determined under the provisions of--22this subsection. All refunds shall be paid from the sales tax refund fund--23upon warrants of the director of accounts and reports pursuant to vouchers--24approved by the director or the director's designee;--25(jjj) all sales of dietary supplements dispensed pursuant to a--26prescription order by a licensed practitioner or a mid-level practitioner as--27defined by K.S.A. 65-1626, and amendments thereto. As used in this--28subsection, "dietary supplement" means any product, other than tobacco,--29intended to supplement the diet that: (1) Contains one or more of the--30following dietary ingredients: A vitamin, a mineral, an herb or other--31botanical, an amino acid, a dietary substance for use by humans to--32supplement the diet by increasing the total dietary intake or a concentrate,--33metabolite, constituent, extract or combination of any such ingredient; (2)--34is intended for ingestion in tablet, capsule, powder, softgel, gelcap or--35liquid form, or if not intended for ingestion, in such a form, is not--36represented as conventional food and is not represented for use as a sole--37item of a meal or of the diet; and (3) is required to be labeled as a dietary--38supplement, identifiable by the supplemental facts box found on the label--39and as required pursuant to 21 C.F.R. § 101.36;--40(lll) all sales of tangible personal property and services purchased by--41special olympics Kansas, inc. for the purpose of providing year-round--42sports training and athletic competition in a variety of olympic-type sports--43for individuals with intellectual disabilities by giving them continuing--1opportunities to develop physical fitness, demonstrate courage, experience--2joy and participate in a sharing of gifts, skills and friendship with their--3families, other special olympics athletes and the community, and activities--4provided or sponsored by such organization, and all sales of tangible--5personal property by or on behalf of any such organization;--6(mmm) all sales of tangible personal property purchased by or on--7behalf of the Marillac center, inc., which is exempt from federal income--8taxation pursuant to section 501(c)(3) of the federal internal revenue code,--9for the purpose of providing psycho-social-biological and special--10education services to children, and all sales of any such property by or on--11behalf of such organization for such purpose;--12(nnn) all sales of tangible personal property and services purchased--13by the west Sedgwick county-sunrise rotary club and sunrise charitable--14fund for the purpose of constructing a boundless playground which is an--15integrated, barrier free and developmentally advantageous play--16environment for children of all abilities and disabilities;--17(ooo) all sales of tangible personal property by or on behalf of a--18public library serving the general public and supported in whole or in part--19with tax money or a not-for-profit organization whose purpose is to raise--20funds for or provide services or other benefits to any such public library;--21(ppp) all sales of tangible personal property and services purchased--22by or on behalf of a homeless shelter that is exempt from federal income--23taxation pursuant to section 501(c)(3) of the federal income tax code of--241986, and used by any such homeless shelter to provide emergency and--25transitional housing for individuals and families experiencing--26homelessness, and all sales of any such property by or on behalf of any--27such homeless shelter for any such purpose;--28(qqq) all sales of tangible personal property and services purchased--29by TLC for children and families, inc., hereinafter referred to as TLC,--30which is exempt from federal income taxation pursuant to section 501(c)--31(3) of the federal internal revenue code of 1986, and such property and--32services are used for the purpose of providing emergency shelter and--33treatment for abused and neglected children as well as meeting additional--34critical needs for children, juveniles and family, and all sales of any such--35property by or on behalf of TLC for any such purpose; and all sales of--36tangible personal property or services purchased by a contractor for the--37purpose of constructing, maintaining, repairing, enlarging, furnishing or--38remodeling facilities for the operation of services for TLC for any such--39purpose that would be exempt from taxation under the provisions of this--40section if purchased directly by TLC. Nothing in this subsection shall be--41deemed to exempt the purchase of any construction machinery, equipment--42or tools used in the constructing, maintaining, repairing, enlarging,--43furnishing or remodeling such facilities for TLC. When TLC contracts for--1the purpose of constructing, maintaining, repairing, enlarging, furnishing--2or remodeling such facilities, it shall obtain from the state and furnish to--3the contractor an exemption certificate for the project involved, and the--4contractor may purchase materials for incorporation in such project. The--5contractor shall furnish the number of such certificate to all suppliers from--6whom such purchases are made, and such suppliers shall execute invoices--7covering the same bearing the number of such certificate. Upon--8completion of the project the contractor shall furnish to TLC a sworn--9statement, on a form to be provided by the director of taxation, that all--10purchases so made were entitled to exemption under this subsection. All--11invoices shall be held by the contractor for a period of five years and shall--12be subject to audit by the director of taxation. If any materials purchased--13under such a certificate are found not to have been incorporated in the--14building or other project or not to have been returned for credit or the sales--15or compensating tax otherwise imposed upon such materials that will not--16be so incorporated in the building or other project reported and paid by--17such contractor to the director of taxation not later than the 20th day of the--18month following the close of the month in which it shall be determined--19that such materials will not be used for the purpose for which such--20certificate was issued, TLC shall be liable for tax on all materials--21purchased for the project, and upon payment thereof it may recover the--22same from the contractor together with reasonable attorney fees. Any--23contractor or any agent, employee or subcontractor thereof, who shall use--24or otherwise dispose of any materials purchased under such a certificate--25for any purpose other than that for which such a certificate is issued--26without the payment of the sales or compensating tax otherwise imposed--27upon such materials, shall be guilty of a misdemeanor and, upon--28conviction therefor, shall be subject to the penalties provided for in K.S.A.--2979-3615(h), and amendments thereto;--30(rrr) all sales of tangible personal property and services purchased by--31any county law library maintained pursuant to law and sales of tangible--32personal property and services purchased by an organization that would--33have been exempt from taxation under the provisions of this subsection if--34purchased directly by the county law library for the purpose of providing--35legal resources to attorneys, judges, students and the general public, and--36all sales of any such property by or on behalf of any such county law--37library;--38(sss) all sales of tangible personal property and services purchased by--39catholic charities or youthville, hereinafter referred to as charitable family--40providers, which is exempt from federal income taxation pursuant to--41section 501(c)(3) of the federal internal revenue code of 1986, and which--42such property and services are used for the purpose of providing--43emergency shelter and treatment for abused and neglected children as well--1as meeting additional critical needs for children, juveniles and family, and--2all sales of any such property by or on behalf of charitable family--3providers for any such purpose; and all sales of tangible personal property--4or services purchased by a contractor for the purpose of constructing,--5maintaining, repairing, enlarging, furnishing or remodeling facilities for--6the operation of services for charitable family providers for any such--7purpose which would be exempt from taxation under the provisions of this--8section if purchased directly by charitable family providers. Nothing in--9this subsection shall be deemed to exempt the purchase of any construction--10machinery, equipment or tools used in the constructing, maintaining,--11repairing, enlarging, furnishing or remodeling such facilities for charitable--12family providers. When charitable family providers contracts for the--13purpose of constructing, maintaining, repairing, enlarging, furnishing or--14remodeling such facilities, it shall obtain from the state and furnish to the--15contractor an exemption certificate for the project involved, and the--16contractor may purchase materials for incorporation in such project. The--17contractor shall furnish the number of such certificate to all suppliers from--18whom such purchases are made, and such suppliers shall execute invoices--19covering the same bearing the number of such certificate. Upon--20completion of the project the contractor shall furnish to charitable family--21providers a sworn statement, on a form to be provided by the director of--22taxation, that all purchases so made were entitled to exemption under this--23subsection. All invoices shall be held by the contractor for a period of five--24years and shall be subject to audit by the director of taxation. If any--25materials purchased under such a certificate are found not to have been--26incorporated in the building or other project or not to have been returned--27for credit or the sales or compensating tax otherwise imposed upon such--28materials that will not be so incorporated in the building or other project--29reported and paid by such contractor to the director of taxation not later--30than the 20th day of the month following the close of the month in which it--31shall be determined that such materials will not be used for the purpose for--32which such certificate was issued, charitable family providers shall be--33liable for tax on all materials purchased for the project, and upon payment--34thereof it may recover the same from the contractor together with--35reasonable attorney fees. Any contractor or any agent, employee or--36subcontractor thereof, who shall use or otherwise dispose of any materials--37purchased under such a certificate for any purpose other than that for--38which such a certificate is issued without the payment of the sales or--39compensating tax otherwise imposed upon such materials, shall be guilty--40of a misdemeanor and, upon conviction therefor, shall be subject to the--41penalties provided for in K.S.A. 79-3615(h), and amendments thereto;--42(ttt) all sales of tangible personal property or services purchased by a--43contractor for a project for the purpose of restoring, constructing,--1equipping, reconstructing, maintaining, repairing, enlarging, furnishing or--2remodeling a home or facility owned by a nonprofit museum that has been--3granted an exemption pursuant to subsection (qq), which such home or--4facility is located in a city that has been designated as a qualified--5hometown pursuant to the provisions of K.S.A. 75-5071 et seq., and--6amendments thereto, and which such project is related to the purposes of--7K.S.A. 75-5071 et seq., and amendments thereto, and that would be--8exempt from taxation under the provisions of this section if purchased--9directly by such nonprofit museum. Nothing in this subsection shall be--10deemed to exempt the purchase of any construction machinery, equipment--11or tools used in the restoring, constructing, equipping, reconstructing,--12maintaining, repairing, enlarging, furnishing or remodeling a home or--13facility for any such nonprofit museum. When any such nonprofit museum--14shall contract for the purpose of restoring, constructing, equipping,--15reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--16a home or facility, it shall obtain from the state and furnish to the--17contractor an exemption certificate for the project involved, and the--18contractor may purchase materials for incorporation in such project. The--19contractor shall furnish the number of such certificates to all suppliers--20from whom such purchases are made, and such suppliers shall execute--21invoices covering the same bearing the number of such certificate. Upon--22completion of the project, the contractor shall furnish to such nonprofit--23museum a sworn statement on a form to be provided by the director of--24taxation that all purchases so made were entitled to exemption under this--25subsection. All invoices shall be held by the contractor for a period of five--26years and shall be subject to audit by the director of taxation. If any--27materials purchased under such a certificate are found not to have been--28incorporated in the building or other project or not to have been returned--29for credit or the sales or compensating tax otherwise imposed upon such--30materials that will not be so incorporated in a home or facility or other--31project reported and paid by such contractor to the director of taxation not--32later than the 20th day of the month following the close of the month in--33which it shall be determined that such materials will not be used for the--34purpose for which such certificate was issued, such nonprofit museum--35shall be liable for tax on all materials purchased for the project, and upon--36payment thereof it may recover the same from the contractor together with--37reasonable attorney fees. Any contractor or any agent, employee or--38subcontractor thereof, who shall use or otherwise dispose of any materials--39purchased under such a certificate for any purpose other than that for--40which such a certificate is issued without the payment of the sales or--41compensating tax otherwise imposed upon such materials, shall be guilty--42of a misdemeanor and, upon conviction therefor, shall be subject to the--43penalties provided for in K.S.A. 79-3615(h), and amendments thereto;--1(uuu) all sales of tangible personal property and services purchased--2by Kansas children's service league, hereinafter referred to as KCSL,--3which is exempt from federal income taxation pursuant to section 501(c)--4(3) of the federal internal revenue code of 1986, and which such property--5and services are used for the purpose of providing for the prevention and--6treatment of child abuse and maltreatment as well as meeting additional--7critical needs for children, juveniles and family, and all sales of any such--8property by or on behalf of KCSL for any such purpose; and all sales of--9tangible personal property or services purchased by a contractor for the--10purpose of constructing, maintaining, repairing, enlarging, furnishing or--11remodeling facilities for the operation of services for KCSL for any such--12purpose that would be exempt from taxation under the provisions of this--13section if purchased directly by KCSL. Nothing in this subsection shall be--14deemed to exempt the purchase of any construction machinery, equipment--15or tools used in the constructing, maintaining, repairing, enlarging,--16furnishing or remodeling such facilities for KCSL. When KCSL contracts--17for the purpose of constructing, maintaining, repairing, enlarging,--18furnishing or remodeling such facilities, it shall obtain from the state and--19furnish to the contractor an exemption certificate for the project involved,--20and the contractor may purchase materials for incorporation in such--21project. The contractor shall furnish the number of such certificate to all--22suppliers from whom such purchases are made, and such suppliers shall--23execute invoices covering the same bearing the number of such certificate.--24Upon completion of the project the contractor shall furnish to KCSL a--25sworn statement, on a form to be provided by the director of taxation, that--26all purchases so made were entitled to exemption under this subsection.--27All invoices shall be held by the contractor for a period of five years and--28shall be subject to audit by the director of taxation. If any materials--29purchased under such a certificate are found not to have been incorporated--30in the building or other project or not to have been returned for credit or--31the sales or compensating tax otherwise imposed upon such materials that--32will not be so incorporated in the building or other project reported and--33paid by such contractor to the director of taxation not later than the 20th--34day of the month following the close of the month in which it shall be--35determined that such materials will not be used for the purpose for which--36such certificate was issued, KCSL shall be liable for tax on all materials--37purchased for the project, and upon payment thereof it may recover the--38same from the contractor together with reasonable attorney fees. Any--39contractor or any agent, employee or subcontractor thereof, who shall use--40or otherwise dispose of any materials purchased under such a certificate--41for any purpose other than that for which such a certificate is issued--42without the payment of the sales or compensating tax otherwise imposed--43upon such materials, shall be guilty of a misdemeanor and, upon--1conviction therefor, shall be subject to the penalties provided for in K.S.A.--279-3615(h), and amendments thereto;--3(vvv) all sales of tangible personal property or services, including the--4renting and leasing of tangible personal property or services, purchased by--5jazz in the woods, inc., a Kansas corporation that is exempt from federal--6income taxation pursuant to section 501(c)(3) of the federal internal--7revenue code, for the purpose of providing jazz in the woods, an event--8benefiting children-in-need and other nonprofit charities assisting such--9children, and all sales of any such property by or on behalf of such--10organization for such purpose;--11(www) all sales of tangible personal property purchased by or on--12behalf of the Frontenac education foundation, which is exempt from--13federal income taxation pursuant to section 501(c)(3) of the federal--14internal revenue code, for the purpose of providing education support for--15students, and all sales of any such property by or on behalf of such--16organization for such purpose;--17(xxx) all sales of personal property and services purchased by the--18booth theatre foundation, inc., an organization, which is exempt from--19federal income taxation pursuant to section 501(c)(3) of the federal--20internal revenue code of 1986, and which such personal property and--21services are used by any such organization in the constructing, equipping,--22reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--23of the booth theatre, and all sales of tangible personal property or services--24purchased by a contractor for the purpose of constructing, equipping,--25reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--26the booth theatre for such organization, that would be exempt from--27taxation under the provisions of this section if purchased directly by such--28organization. Nothing in this subsection shall be deemed to exempt the--29purchase of any construction machinery, equipment or tools used in the--30constructing, equipping, reconstructing, maintaining, repairing, enlarging,--31furnishing or remodeling facilities for any such organization. When any--32such organization shall contract for the purpose of constructing, equipping,--33reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--34facilities, it shall obtain from the state and furnish to the contractor an--35exemption certificate for the project involved, and the contractor may--36purchase materials for incorporation in such project. The contractor shall--37furnish the number of such certificate to all suppliers from whom such--38purchases are made, and such suppliers shall execute invoices covering the--39same bearing the number of such certificate. Upon completion of the--40project the contractor shall furnish to such organization concerned a sworn--41statement, on a form to be provided by the director of taxation, that all--42purchases so made were entitled to exemption under this subsection. All--43invoices shall be held by the contractor for a period of five years and shall--1be subject to audit by the director of taxation. If any materials purchased--2under such a certificate are found not to have been incorporated in such--3facilities or not to have been returned for credit or the sales or--4compensating tax otherwise imposed upon such materials that will not be--5so incorporated in such facilities reported and paid by such contractor to--6the director of taxation not later than the 20th day of the month following--7the close of the month in which it shall be determined that such materials--8will not be used for the purpose for which such certificate was issued, such--9organization concerned shall be liable for tax on all materials purchased--10for the project, and upon payment thereof it may recover the same from--11the contractor together with reasonable attorney fees. Any contractor or--12any agent, employee or subcontractor thereof, who shall use or otherwise--13dispose of any materials purchased under such a certificate for any purpose--14other than that for which such a certificate is issued without the payment--15of the sales or compensating tax otherwise imposed upon such materials,--16shall be guilty of a misdemeanor and, upon conviction therefor, shall be--17subject to the penalties provided for in K.S.A. 79-3615(h), and--18amendments thereto. Sales tax paid on and after January 1, 2007, but prior--19to the effective date of this act upon the gross receipts received from any--20sale which would have been exempted by the provisions of this subsection--21had such sale occurred after the effective date of this act shall be refunded.--22Each claim for a sales tax refund shall be verified and submitted to the--23director of taxation upon forms furnished by the director and shall be--24accompanied by any additional documentation required by the director.--25The director shall review each claim and shall refund that amount of sales--26tax paid as determined under the provisions of this subsection. All refunds--27shall be paid from the sales tax refund fund upon warrants of the director--28of accounts and reports pursuant to vouchers approved by the director or--29the director's designee;--30(yyy) all sales of tangible personal property and services purchased--31by TLC charities foundation, inc., hereinafter referred to as TLC charities,--32which is exempt from federal income taxation pursuant to section 501(c)--33(3) of the federal internal revenue code of 1986, and which such property--34and services are used for the purpose of encouraging private philanthropy--35to further the vision, values, and goals of TLC for children and families,--36inc.; and all sales of such property and services by or on behalf of TLC--37charities for any such purpose and all sales of tangible personal property or--38services purchased by a contractor for the purpose of constructing,--39maintaining, repairing, enlarging, furnishing or remodeling facilities for--40the operation of services for TLC charities for any such purpose that would--41be exempt from taxation under the provisions of this section if purchased--42directly by TLC charities. Nothing in this subsection shall be deemed to--43exempt the purchase of any construction machinery, equipment or tools--1used in the constructing, maintaining, repairing, enlarging, furnishing or--2remodeling such facilities for TLC charities. When TLC charities contracts--3for the purpose of constructing, maintaining, repairing, enlarging,--4furnishing or remodeling such facilities, it shall obtain from the state and--5furnish to the contractor an exemption certificate for the project involved,--6and the contractor may purchase materials for incorporation in such--7project. The contractor shall furnish the number of such certificate to all--8suppliers from whom such purchases are made, and such suppliers shall--9execute invoices covering the same bearing the number of such certificate.--10Upon completion of the project the contractor shall furnish to TLC--11charities a sworn statement, on a form to be provided by the director of--12taxation, that all purchases so made were entitled to exemption under this--13subsection. All invoices shall be held by the contractor for a period of five--14years and shall be subject to audit by the director of taxation. If any--15materials purchased under such a certificate are found not to have been--16incorporated in the building or other project or not to have been returned--17for credit or the sales or compensating tax otherwise imposed upon such--18materials that will not be incorporated into the building or other project--19reported and paid by such contractor to the director of taxation not later--20than the 20th day of the month following the close of the month in which it--21shall be determined that such materials will not be used for the purpose for--22which such certificate was issued, TLC charities shall be liable for tax on--23all materials purchased for the project, and upon payment thereof it may--24recover the same from the contractor together with reasonable attorney--25fees. Any contractor or any agent, employee or subcontractor thereof, who--26shall use or otherwise dispose of any materials purchased under such a--27certificate for any purpose other than that for which such a certificate is--28issued without the payment of the sales or compensating tax otherwise--29imposed upon such materials, shall be guilty of a misdemeanor and, upon--30conviction therefor, shall be subject to the penalties provided for in K.S.A.--3179-3615(h), and amendments thereto;--32(zzz) all sales of tangible personal property purchased by the rotary--33club of shawnee foundation, which is exempt from federal income taxation--34pursuant to section 501(c)(3) of the federal internal revenue code of 1986,--35as amended, used for the purpose of providing contributions to community--36service organizations and scholarships;--37(aaaa) all sales of personal property and services purchased by or on--38behalf of victory in the valley, inc., which is exempt from federal income--39taxation pursuant to section 501(c)(3) of the federal internal revenue code,--40for the purpose of providing a cancer support group and services for--41persons with cancer, and all sales of any such property by or on behalf of--42any such organization for any such purpose;--43(bbbb) all sales of entry or participation fees, charges or tickets by--1Guadalupe health foundation, which is exempt from federal income--2taxation pursuant to section 501(c)(3) of the federal internal revenue code,--3for such organization's annual fundraising event which purpose is to--4provide health care services for uninsured workers;--5(cccc) all sales of tangible personal property or services purchased by--6or on behalf of wayside waifs, inc., which is exempt from federal income--7taxation pursuant to section 501(c)(3) of the federal internal revenue code,--8for the purpose of providing such organization's annual fundraiser, an--9event whose purpose is to support the care of homeless and abandoned--10animals, animal adoption efforts, education programs for children and--11efforts to reduce animal over-population and animal welfare services, and--12all sales of any such property, including entry or participation fees or--13charges, by or on behalf of such organization for such purpose;--14(dddd) all sales of tangible personal property or services purchased--15by or on behalf of goodwill industries or Easter seals of Kansas, inc., both--16of which are exempt from federal income taxation pursuant to section--17501(c)(3) of the federal internal revenue code, for the purpose of providing--18education, training and employment opportunities for people with--19disabilities and other barriers to employment;--20(eeee) all sales of tangible personal property or services purchased by--21or on behalf of all American beef battalion, inc., which is exempt from--22federal income taxation pursuant to section 501(c)(3) of the federal--23internal revenue code, for the purpose of educating, promoting and--24participating as a contact group through the beef cattle industry in order to--25carry out such projects that provide support and morale to members of the--26United States armed forces and military services;--27(ffff) all sales of tangible personal property and services purchased by--28sheltered living, inc., which is exempt from federal income taxation--29pursuant to section 501(c)(3) of the federal internal revenue code of 1986,--30and which such property and services are used for the purpose of--31providing residential and day services for people with developmental--32disabilities or intellectual disability, or both, and all sales of any such--33property by or on behalf of sheltered living, inc., for any such purpose; and--34all sales of tangible personal property or services purchased by a--35contractor for the purpose of rehabilitating, constructing, maintaining,--36repairing, enlarging, furnishing or remodeling homes and facilities for--37sheltered living, inc., for any such purpose that would be exempt from--38taxation under the provisions of this section if purchased directly by--39sheltered living, inc. Nothing in this subsection shall be deemed to exempt--40the purchase of any construction machinery, equipment or tools used in the--41constructing, maintaining, repairing, enlarging, furnishing or remodeling--42such homes and facilities for sheltered living, inc. When sheltered living,--43inc., contracts for the purpose of rehabilitating, constructing, maintaining,--1repairing, enlarging, furnishing or remodeling such homes and facilities, it--2shall obtain from the state and furnish to the contractor an exemption--3certificate for the project involved, and the contractor may purchase--4materials for incorporation in such project. The contractor shall furnish the--5number of such certificate to all suppliers from whom such purchases are--6made, and such suppliers shall execute invoices covering the same bearing--7the number of such certificate. Upon completion of the project the--8contractor shall furnish to sheltered living, inc., a sworn statement, on a--9form to be provided by the director of taxation, that all purchases so made--10were entitled to exemption under this subsection. All invoices shall be held--11by the contractor for a period of five years and shall be subject to audit by--12the director of taxation. If any materials purchased under such a certificate--13are found not to have been incorporated in the building or other project or--14not to have been returned for credit or the sales or compensating tax--15otherwise imposed upon such materials that will not be so incorporated in--16the building or other project reported and paid by such contractor to the--17director of taxation not later than the 20th day of the month following the--18close of the month in which it shall be determined that such materials will--19not be used for the purpose for which such certificate was issued, sheltered--20living, inc., shall be liable for tax on all materials purchased for the--21project, and upon payment thereof it may recover the same from the--22contractor together with reasonable attorney fees. Any contractor or any--23agent, employee or subcontractor thereof, who shall use or otherwise--24dispose of any materials purchased under such a certificate for any purpose--25other than that for which such a certificate is issued without the payment--26of the sales or compensating tax otherwise imposed upon such materials,--27shall be guilty of a misdemeanor and, upon conviction therefor, shall be--28subject to the penalties provided for in K.S.A. 79-3615(h), and--29amendments thereto;--30(gggg) all sales of game birds for which the primary purpose is use in--31hunting;--32(hhhh) all sales of tangible personal property or services purchased--33on or after July 1, 2014, for the purpose of and in conjunction with--34constructing, reconstructing, enlarging or remodeling a business identified--35under the North American industry classification system (NAICS)--36subsectors 1123, 1124, 112112, 112120 or 112210, and the sale and--37installation of machinery and equipment purchased for installation at any--38such business. The exemption provided in this subsection shall not apply--39to projects that have actual total costs less than $50,000. When a person--40contracts for the construction, reconstruction, enlargement or remodeling--41of any such business, such person shall obtain from the state and furnish to--42the contractor an exemption certificate for the project involved, and the--43contractor may purchase materials, machinery and equipment for--1incorporation in such project. The contractor shall furnish the number of--2such certificates to all suppliers from whom such purchases are made, and--3such suppliers shall execute invoices covering the same bearing the--4number of such certificate. Upon completion of the project, the contractor--5shall furnish to the owner of the business a sworn statement, on a form to--6be provided by the director of taxation, that all purchases so made were--7entitled to exemption under this subsection. All invoices shall be held by--8the contractor for a period of five years and shall be subject to audit by the--9director of taxation. Any contractor or any agent, employee or--10subcontractor of the contractor, who shall use or otherwise dispose of any--11materials, machinery or equipment purchased under such a certificate for--12any purpose other than that for which such a certificate is issued without--13the payment of the sales or compensating tax otherwise imposed thereon,--14shall be guilty of a misdemeanor and, upon conviction therefor, shall be--15subject to the penalties provided for in K.S.A. 79-3615(h), and--16amendments thereto;--17(iiii) all sales of tangible personal property or services purchased by a--18contractor for the purpose of constructing, maintaining, repairing,--19enlarging, furnishing or remodeling facilities for the operation of services--20for Wichita children's home for any such purpose that would be exempt--21from taxation under the provisions of this section if purchased directly by--22Wichita children's home. Nothing in this subsection shall be deemed to--23exempt the purchase of any construction machinery, equipment or tools--24used in the constructing, maintaining, repairing, enlarging, furnishing or--25remodeling such facilities for Wichita children's home. When Wichita--26children's home contracts for the purpose of constructing, maintaining,--27repairing, enlarging, furnishing or remodeling such facilities, it shall obtain--28from the state and furnish to the contractor an exemption certificate for the--29project involved, and the contractor may purchase materials for--30incorporation in such project. The contractor shall furnish the number of--31such certificate to all suppliers from whom such purchases are made, and--32such suppliers shall execute invoices covering the same bearing the--33number of such certificate. Upon completion of the project, the contractor--34shall furnish to Wichita children's home a sworn statement, on a form to be--35provided by the director of taxation, that all purchases so made were--36entitled to exemption under this subsection. All invoices shall be held by--37the contractor for a period of five years and shall be subject to audit by the--38director of taxation. If any materials purchased under such a certificate are--39found not to have been incorporated in the building or other project or not--40to have been returned for credit or the sales or compensating tax otherwise--41imposed upon such materials that will not be so incorporated in the--42building or other project reported and paid by such contractor to the--43director of taxation not later than the 20th day of the month following the--1close of the month in which it shall be determined that such materials will--2not be used for the purpose for which such certificate was issued, Wichita--3children's home shall be liable for the tax on all materials purchased for the--4project, and upon payment, it may recover the same from the contractor--5together with reasonable attorney fees. Any contractor or any agent,--6employee or subcontractor, who shall use or otherwise dispose of any--7materials purchased under such a certificate for any purpose other than that--8for which such a certificate is issued without the payment of the sales or--9compensating tax otherwise imposed upon such materials, shall be guilty--10of a misdemeanor and, upon conviction, shall be subject to the penalties--11provided for in K.S.A. 79-3615(h), and amendments thereto;--12(jjjj) all sales of tangible personal property or services purchased by--13or on behalf of the beacon, inc., that is exempt from federal income--14taxation pursuant to section 501(c)(3) of the federal internal revenue code,--15for the purpose of providing those desiring help with food, shelter, clothing--16and other necessities of life during times of special need;--17(kkkk) all sales of tangible personal property and services purchased--18by or on behalf of reaching out from within, inc., which is exempt from--19federal income taxation pursuant to section 501(c)(3) of the federal--20internal revenue code, for the purpose of sponsoring self-help programs for--21incarcerated persons that will enable such incarcerated persons to become--22role models for non-violence while in correctional facilities and productive--23family members and citizens upon return to the community;--24(llll) all sales of tangible personal property and services purchased by--25Gove county healthcare endowment foundation, inc., which is exempt--26from federal income taxation pursuant to section 501(c)(3) of the federal--27internal revenue code of 1986, and which such property and services are--28used for the purpose of constructing and equipping an airport in Quinter,--29Kansas, and all sales of tangible personal property or services purchased--30by a contractor for the purpose of constructing and equipping an airport in--31Quinter, Kansas, for such organization, that would be exempt from--32taxation under the provisions of this section if purchased directly by such--33organization. Nothing in this subsection shall be deemed to exempt the--34purchase of any construction machinery, equipment or tools used in the--35constructing or equipping of facilities for such organization. When such--36organization shall contract for the purpose of constructing or equipping an--37airport in Quinter, Kansas, it shall obtain from the state and furnish to the--38contractor an exemption certificate for the project involved, and the--39contractor may purchase materials for incorporation in such project. The--40contractor shall furnish the number of such certificate to all suppliers from--41whom such purchases are made, and such suppliers shall execute invoices--42covering the same bearing the number of such certificate. Upon--43completion of the project, the contractor shall furnish to such organization--1concerned a sworn statement, on a form to be provided by the director of--2taxation, that all purchases so made were entitled to exemption under this--3subsection. All invoices shall be held by the contractor for a period of five--4years and shall be subject to audit by the director of taxation. If any--5materials purchased under such a certificate are found not to have been--6incorporated in such facilities or not to have been returned for credit or the--7sales or compensating tax otherwise imposed upon such materials that will--8not be so incorporated in such facilities reported and paid by such--9contractor to the director of taxation no later than the 20th day of the month--10following the close of the month in which it shall be determined that such--11materials will not be used for the purpose for which such certificate was--12issued, such organization concerned shall be liable for tax on all materials--13purchased for the project, and upon payment thereof it may recover the--14same from the contractor together with reasonable attorney fees. Any--15contractor or any agent, employee or subcontractor thereof, who purchased--16under such a certificate for any purpose other than that for which such a--17certificate is issued without the payment of the sales or compensating tax--18otherwise imposed upon such materials, shall be guilty of a misdemeanor--19and, upon conviction therefor, shall be subject to the penalties provided for--20in K.S.A. 79-3615(h), and amendments thereto. The provisions of this--21subsection shall expire and have no effect on and after July 1, 2019;--22(mmmm) all sales of gold or silver coins; and palladium, platinum,--23gold or silver bullion. For the purposes of this subsection, "bullion" means--24bars, ingots or commemorative medallions of gold, silver, platinum,--25palladium, or a combination thereof, for which the value of the metal--26depends on its content and not the form;--27(nnnn) all sales of tangible personal property or services purchased--28by friends of hospice of Jefferson county, an organization that is exempt--29from federal income taxation pursuant to section 501(c)(3) of the federal--30internal revenue code of 1986, for the purpose of providing support to the--31Jefferson county hospice agency in end-of-life care of Jefferson county--32families, friends and neighbors, and all sales of entry or participation fees,--33charges or tickets by friends of hospice of Jefferson county for such--34organization's fundraising event for such purpose;--35(oooo) all sales of tangible personal property or services purchased--36for the purpose of and in conjunction with constructing, reconstructing,--37enlarging or remodeling a qualified business facility by a qualified firm or--38qualified supplier that meets the requirements established in K.S.A. 2024--39Supp. 74-50,312 and 74-50,319, and amendments thereto, and that has--40been approved for a project exemption certificate by the secretary of--41commerce, and the sale and installation of machinery and equipment--42purchased by such qualified firm or qualified supplier for installation at--43any such qualified business facility. When a person shall contract for the--1construction, reconstruction, enlargement or remodeling of any such--2qualified business facility, such person shall obtain from the state and--3furnish to the contractor an exemption certificate for the project involved,--4and the contractor may purchase materials, machinery and equipment for--5incorporation in such project. The contractor shall furnish the number of--6such certificates to all suppliers from whom such purchases are made, and--7such suppliers shall execute invoices covering the same bearing the--8number of such certificate. Upon completion of the project, the contractor--9shall furnish to the owner of the qualified firm or qualified supplier a--10sworn statement, on a form to be provided by the director of taxation, that--11all purchases so made were entitled to exemption under this subsection.--12All invoices shall be held by the contractor for a period of five years and--13shall be subject to audit by the director of taxation. Any contractor or any--14agent, employee or subcontractor thereof who shall use or otherwise--15dispose of any materials, machinery or equipment purchased under such a--16certificate for any purpose other than that for which such a certificate is--17issued without the payment of the sales or compensating tax otherwise--18imposed thereon, shall be guilty of a misdemeanor and, upon conviction--19therefor, shall be subject to the penalties provided for in K.S.A. 79---203615(h), and amendments thereto. As used in this subsection, "qualified--21business facility," "qualified firm" and "qualified supplier" mean the same--22as defined in K.S.A. 2024 Supp. 74-50,311, and amendments thereto;--23(pppp) (1) all sales of tangible personal property or services--24purchased by a not-for-profit corporation that is designated as an area--25agency on aging by the secretary for aging and disabilities services and is--26exempt from federal income taxation pursuant to section 501(c)(3) of the--27federal internal revenue code for the purpose of coordinating and--28providing seniors and those living with disabilities with services that--29promote person-centered care, including home-delivered meals,--30congregate meal settings, long-term case management, transportation,--31information, assistance and other preventative and intervention services to--32help service recipients remain in their homes and communities or for the--33purpose of constructing, equipping, reconstructing, maintaining, repairing,--34enlarging, furnishing or remodeling facilities for such area agency on--35aging; and--36(2) all sales of tangible personal property or services purchased by a--37contractor for the purpose of constructing, equipping, reconstructing,--38maintaining, repairing, enlarging, furnishing or remodeling facilities for an--39area agency on aging that would be exempt from taxation under the--40provisions of this section if purchased directly by such area agency on--41aging. Nothing in this paragraph shall be deemed to exempt the purchase--42of any construction machinery, equipment or tools used in the--43constructing, equipping, reconstructing, maintaining, repairing, enlarging,--1furnishing or remodeling facilities for an area agency on aging. When an--2area agency on aging contracts for the purpose of constructing, equipping,--3reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--4facilities, it shall obtain from the state and furnish to the contractor an--5exemption certificate for the project involved, and such contractor may--6purchase materials for incorporation in such project. The contractor shall--7furnish the number of such certificate to all suppliers from whom such--8purchases are made, and such suppliers shall execute invoices covering the--9same bearing the number of such certificate. Upon completion of the--10project, the contractor shall furnish to such area agency on aging a sworn--11statement, on a form to be provided by the director of taxation, that all--12purchases so made were entitled to exemption under this subsection. All--13invoices shall be held by the contractor for a period of five years and shall--14be subject to audit by the director of taxation. If any materials purchased--15under such a certificate are found not to have been incorporated in the--16building or other project or not to have been returned for credit or the sales--17or compensating tax otherwise imposed upon such materials that will not--18be so incorporated in the building or other project reported and paid by--19such contractor to the director of taxation not later than the 20th day of the--20month following the close of the month in which it shall be determined--21that such materials will not be used for the purpose for which such--22certificate was issued, the area agency on aging concerned shall be liable--23for tax on all materials purchased for the project, and upon payment--24thereof, the area agency on aging may recover the same from the--25contractor together with reasonable attorney fees. Any contractor or any--26agent, employee or subcontractor thereof who shall use or otherwise--27dispose of any materials purchased under such a certificate for any purpose--28other than that for which such a certificate is issued without the payment--29of the sales or compensating tax otherwise imposed upon such materials--30shall be guilty of a misdemeanor and, upon conviction therefor, shall be--31subject to the penalties provided for in K.S.A. 79-3615(h), and--32amendments thereto;--33(qqqq) all sales of tangible personal property or services purchased--34by Kansas suicide prevention HQ, inc., an organization that is exempt--35from federal income taxation pursuant to section 501(c)(3) of the federal--36internal revenue code of 1986, for the purpose of bringing suicide--37prevention training and awareness to communities across the state;--38(rrrr) all sales of the services of slaughtering, butchering, custom--39cutting, dressing, processing and packaging of an animal for human--40consumption when the animal is delivered or furnished by a customer that--41owns the animal and such meat or poultry is for use or consumption by--42such customer;--43(ssss) all sales of tangible personal property or services purchased by--1or on behalf of doorstep inc., an organization that is exempt from federal--2income taxation pursuant to section 501(c)(3) of the federal internal--3revenue code of 1986, for the purpose of providing short-term emergency--4aid to families and individuals in need, including assistance with food,--5clothing, rent, prescription medications, transportation and utilities, and--6providing information on services to promote long-term self-sufficiency;--7(tttt) on and after January 1, 2024, all sales of tangible personal--8property or services purchased by exploration place, inc., an organization--9that is exempt from federal income taxation pursuant to section 501(c)(3)--10of the federal internal revenue code, and which such property and services--11are used for the purpose of constructing, remodeling, furnishing or--12equipping a riverfront amphitheater, a destination playscape, an education--13center and indoor renovations at exploration place in Wichita, Kansas, all--14sales of tangible personal property or services purchased by Kansas--15children's discovery center inc. in Topeka, Kansas, and which such--16property and services are used for the purpose of constructing, remodeling,--17furnishing or equipping projects that include indoor-outdoor classrooms,--18an expanded multi-media gallery, a workshop and loading dock and safety--19upgrades such as a tornado shelter, lactation room, first aid room and--20sensory room and all sales of tangible personal property or services--21purchased by a contractor for the purpose of constructing, remodeling,--22furnishing or equipping such projects, for such organizations, that would--23be exempt from taxation under the provisions of this section if purchased--24directly by such organizations. Nothing in this subsection shall be deemed--25to exempt the purchase of any construction machinery, equipment or tools--26used in the constructing, remodeling, furnishing or equipping of facilities--27for such organization. When such organization shall contract for the--28purpose of constructing, remodeling, furnishing or equipping such--29projects, it shall obtain from the state and furnish to the contractor an--30exemption certificate for the project involved, and the contractor may--31purchase materials for incorporation in such project. The contractor shall--32furnish the number of such certificate to all suppliers from whom such--33purchases are made, and such suppliers shall execute invoices covering the--34same bearing the number of such certificate. Upon completion of the--35project, the contractor shall furnish to such organization a sworn statement,--36on a form to be provided by the director of taxation, that all purchases so--37made were entitled to exemption under this subsection. All invoices shall--38be held by the contractor for a period of five years and shall be subject to--39audit by the director of taxation. If any materials purchased under such a--40certificate are found not to have been incorporated in such facilities or not--41to have been returned for credit or the sales or compensating tax otherwise--42imposed upon such materials that will not be so incorporated in such--43facilities reported and paid by such contractor to the director of taxation no--1later than the 20th day of the month following the close of the month in--2which it shall be determined that such materials will not be used for the--3purpose for which such certificate was issued, such organization shall be--4liable for tax on all materials purchased for the project, and upon payment--5thereof may recover the same from the contractor together with reasonable--6attorney fees. Any contractor or agent, employee or subcontractor thereof,--7who purchased under such a certificate for any purpose other than that for--8which such a certificate is issued without the payment of the sales or--9compensating tax otherwise imposed upon such materials, shall be guilty--10of a misdemeanor and, upon conviction therefor, shall be subject to the--11penalties provided for in K.S.A. 79-3615(h), and amendments thereto.--12Sales tax paid on and after January 1, 2024, but prior to the effective date--13of this act, upon the gross receipts received from any sale exempted by the--14amendatory provisions of this subsection shall be refunded. Each claim for--15a sales tax refund shall be verified and submitted to the director of taxation--16upon forms furnished by the director and shall be accompanied by any--17additional documentation required by the director. The director shall--18review each claim and shall refund that amount of sales tax paid as--19determined under the provisions of this subsection. All refunds shall be--20paid from the sales tax refund fund upon warrants of the director of--21accounts and reports pursuant to vouchers approved by the director or the--22director's designee. The provisions of this subsection shall expire and have--23no effect on and after December 31, 2030;--24(uuuu) (1) (A) all sales of equipment, machinery, software, ancillary--25components, appurtenances, accessories or other infrastructure purchased--26for use in the provision of communications services; and--27(B) all services purchased by a provider in the provision of the--28communications service used in the repair, maintenance or installation in--29such communications service.--30(2) As used in this subsection:--31(A) "Communications service" means internet access service,--32telecommunications service, video service or any combination thereof.--33(B) "Equipment, machinery, software, ancillary components,--34appurtenances, accessories or other infrastructure" includes, but is not--35limited to:--36(i) Wires, cables, fiber, conduits, antennas, poles, switches, routers,--37amplifiers, rectifiers, repeaters, receivers, multiplexers, duplexers,--38transmitters, circuit cards, insulating and protective materials and cases,--39power equipment, backup power equipment, diagnostic equipment, storage--40devices, modems, cable modem termination systems and servers;--41(ii) other general central office or headend equipment, such as--42channel cards, frames and cabinets;--43(iii) equipment used in successor technologies, including items used--1to monitor, test, maintain, enable or facilitate qualifying equipment,--2machinery, software, ancillary components, appurtenances and--3accessories; and--4(iv) other infrastructure that is used in whole or in part to provide--5communications services, including broadcasting, distributing, sending,--6receiving, storing, transmitting, retransmitting, amplifying, switching,--7providing connectivity for or routing communications services.--8(C) "Internet access service" means the same as internet access as--9defined in section 1105 of the internet tax freedom act amendments of--102007, public law 110-108.--11(D) "Provider" means a person or entity that sells communications--12service, including an affiliate or subsidiary.--13(E) "Telecommunications service" means the same as defined in--14K.S.A. 79-3602, and amendments thereto.--15(F) "Video service" means the same as defined in K.S.A. 12-2022,--16and amendments thereto.--17(3) The provisions of this subsection shall expire and have no effect--18on and after July 1, 2029;--19(vvvv) (1) all sales of tangible personal property or services--20purchased by a contractor for the purpose of constructing, equipping,--21reconstructing, maintaining, repairing, enlarging, furnishing or remodeling--22a building that is operated by, or is intended to be operated by, the Kansas--23fairgrounds foundation, a not-for-profit corporation exempt from federal--24income taxation pursuant to section 501(c)(3) of the federal internal--25revenue code of 1986, and located on the grounds of the Kansas state fair,--26and such tangible personal property would be exempt from taxation under--27the provisions of this paragraph if purchased directly by such eligible not---28for-profit corporation. Nothing in this subsection shall be deemed to--29exempt the purchase of any construction machinery, equipment or tools--30used in the constructing, equipping, reconstructing, maintaining, repairing,--31enlarging, furnishing or remodeling a building for such eligible not-for---32profit corporation. When such eligible not-for-profit corporation contracts--33for the purpose of constructing, equipping, reconstructing, maintaining,--34repairing, enlarging, furnishing or remodeling a building, such corporation--35shall obtain from the state and furnish to the contractor an exemption--36certificate for the project involved, and such contractor may purchase--37materials for incorporation in such project. The contractor shall furnish the--38number of such certificate to all suppliers from whom such purchases are--39made, and such suppliers shall execute invoices covering such purchases--40bearing the number of such certificate. Upon completion of the project, the--41contractor shall furnish to such eligible not-for-profit corporation a sworn--42statement, on a form to be provided by the director of taxation, that all--43purchases so made were entitled to exemption under this subsection. All--1invoices shall be held by the contractor for a period of five years and shall--2be subject to audit by the director of taxation. If any materials purchased--3under such a certificate are found not to have been incorporated in the--4building or returned for credit, the contractor shall report and pay the sales--5or compensating tax to the director of taxation not later than the 20th day of--6the month following the close of the month in which it is determined that--7such materials will not be used for the purpose for which such certificate--8was issued. The eligible not-for-profit corporation concerned shall be--9liable for tax on all materials purchased for the project, and upon payment--10thereof, the eligible not-for-profit corporation may recover the same from--11the contractor together with reasonable attorney fees. Any contractor or--12any agent, employee or subcontractor thereof who shall use or otherwise--13dispose of any materials purchased under such a certificate for any purpose--14other than that for which such a certificate is issued without the payment--15of the sales or compensating tax otherwise imposed upon such materials--16shall be guilty of a misdemeanor and, upon conviction therefor, shall be--17subject to the penalties provided for in K.S.A. 79-3615(h), and--18amendments thereto.--19(2) Sales tax paid on and after May 19, 2023, but prior to the effective--20date of this act upon the gross receipts received from any sale which would--21have been exempted by the provisions of this subsection had such sale--22occurred after the effective date of this act shall be refunded. Each claim--23for a sales tax refund shall be verified and submitted to the director of--24taxation upon forms furnished by the director and shall be accompanied by--25any additional documentation required by the director. The director shall--26review each claim and shall refund that amount of sales tax paid as--27determined under the provisions of this subsection. All refunds shall be--28paid from the sales tax refund fund upon warrants of the director of--29accounts and reports pursuant to vouchers approved by the director or the--30director's designee; and--31(wwww) (1) all sales of tangible personal property or services--32purchased by a pregnancy resource center or residential maternity facility.--33(2) As used in this subsection, "pregnancy resource center" or--34"residential maternity facility" means an organization that is:--35(A) Exempt from federal income taxation pursuant to section 501(c)--36(3) of the federal internal revenue code of 1986;--37(B) a nonprofit organization organized under the laws of this state;--38and--39(C) a pregnancy resource center or residential maternity facility that:--40(i) Maintains a dedicated phone number for clients;--41(ii) maintains in this state its primary physical office, clinic or--42residential home that is open for clients for a minimum of 20 hours per--43week, excluding state holidays;--1(iii) offers services, at no cost to the client, for the express purpose of--2providing assistance to women in order to carry their pregnancy to term,--3encourage parenting or adoption, prevent abortion and promote healthy--4childbirth; and--5(iv) utilizes trained healthcare providers, as defined by K.S.A. 2024--6Supp. 79-32,316, and amendments thereto, to perform any available--7medical procedures; and--8(xxxx) (1) all sales of tangible personal property or services--9constituting production or postproduction expenditures purchased for the--10purpose of a certified project by a production company that meets the--11requirements established in section 3, and amendments thereto, and that--12has been approved for a project exemption certificate by the secretary of--13commerce and the sale or installation of machinery and equipment and the--14construction, maintenance, repair or modification of sets, props or scenery--15or other facilities, constituting production or postproduction expenditures--16by such production company for use in this state for a certified project.--17Such sales tax exemptions may be prioritized or limited by the secretary of--18commerce as provided by section 3, and amendments thereto.--19(2) When a production company contracts for construction,--20reconstruction, enlargement or remodeling of any facility for purposes of a--21certified project that constitutes a production or postproduction--22expenditure, the production company shall obtain from the state and--23furnish to the contractor an exemption certificate for the certified project,--24and the contractor may purchase materials, machinery and equipment for--25incorporation in such project. The contractor shall furnish the number of--26such certificates to all suppliers from whom such purchases are made, and--27such suppliers shall execute invoices covering such purchases bearing the--28number of such certificate. Upon completion of the work, the contractor--29shall furnish to the owner of the production company a sworn statement,--30on a form to be provided by the director of taxation, that all purchases so--31made were entitled to exemption under this subsection and section 3, and--32amendments thereto. All invoices shall be held by the contractor for a--33period of five years and subject to audit by the director of taxation. If any--34materials purchased under such a certificate are found not to have been--35incorporated in facilities or returned for credit, the contractor shall report--36and pay the sales or compensating tax on such materials to the director of--37taxation not later than the 20th day of the month following the close of the--38month in which a determination is made that such materials will not be--39used for the purpose for which such certificate was issued. If the--40contractor fails to make such payment for such materials to the director of--41taxation, the production company concerned shall be liable for tax on all--42such materials purchased for the project, and upon payment thereof, the--43production company may recover the amount of the tax paid from the--1contractor together with reasonable attorney fees. Any contractor or any--2agent, employee or subcontractor thereof who uses or otherwise disposes--3of any materials, machinery or equipment purchased under such a--4certificate for any purpose other than that for which such a certificate is--5issued without the payment of the sales or compensating tax otherwise--6imposed thereon shall be guilty of an unclassified misdemeanor and, upon--7conviction therefor, shall be subject to the penalties provided for in K.S.A.--879-3615(h), and amendments thereto.--9(3) As used in this subsection, "certified project," "postproduction--10expenditure," "production company" and "production expenditure" mean--11the same as defined in section 2, and amendments thereto.--12Sec. 8. K.S.A. 2024 Supp. 79-3606 is hereby repealed.--13Sec. 9. This act shall take effect and be in force from and after its--14publication in the statute book.+Division of the Budget+Landon State Office Building++Phone: (785) 296-2436++900 SW Jackson Street, Room 504++[email protected]++Topeka, KS 66612++http://budget.kansas.gov++Adam C. Proffitt, Director++Laura Kelly, Governor++Division of the Budget++February 4, 2025++The Honorable Adam Smith, Chairperson+House Committee on Taxation+300 SW 10th Avenue, Room 346-S+Topeka, Kansas 66612++Dear Representative Smith:++SUBJECT:++Fiscal Note for HB 2038 by House Committee on Commerce, Labor and+Economic Development++In accordance with KSA 75-3715a, the following fiscal note concerning HB 2038 is++respectfully submitted to your committee.++HB 2038 would enact the Kansas Film and Digital Media Production Development Act.++The purpose of the Act would be to incentivize film, video, or digital media productions in Kansas+and facilitate the development and growth of a film, video, or digital media production industry+and associated businesses supporting the industry in this state. The Act would create the Kansas+Film and Digital Media Industry Development Program at the Department of Commerce with the+assistance of the Kansas Creative Arts Industries Commission.++The Act would provide an income tax credit not to exceed $10.0 million per tax year for++production companies approved by the Department of Commerce, including the requirement that+at least 10.0 percent of the total tax credits approved each year would be for Kansas-based+production companies. Eligible production companies could be eligible for a 30.0 percent income+tax credit for qualified production and certain postproduction expenditures. If the tax credit+amount exceeds the taxpayer’s income tax liability for that taxable year, the amount that exceeds+the Kansas income tax liability could be carried forward for up to ten years. The Secretary of+Commerce could approve additional credits as follows:++1.++The amount of the tax credits could increase by up to 5.0 percent if the qualified+production expenditures are for a certified muti-film deal a certified eligible+television series, a certified high-impact production, or contributes to the film-+related infrastructure or workforce development in Kansas.++The Honorable Adam Smith, Chairperson+Page 2—HB 2038++2.++The amount of the tax credits could increase by up to 5.0 percent if 50.0 percent or+more of the crew or above-the-line personnel are Kansas residents.++3.++The amount of the tax credits could increase by up to 5.0 percent if a production+company previously received an income tax credit.++The Act caps the maximum income tax credit amount to 40.0 percent of total qualified++production expenditures or qualified postproduction expenditures made by the production+company for the certified project during that taxable year. The Act includes minimum productions+expenses and other requirements in order to qualify for the income tax credits. The Act would+allow the tax credit to be transferred under certain conditions. The Act also would allow certain+Kansas-based production companies that incur at least $25,000 in qualified expenditures on a+certified production not intended for multimarket distribution but that otherwise would be qualified+expenditures and meets all other qualifications for a tax credit to receive a 25.0 percent tax credit.+If the tax credit amount exceeds the taxpayer’s income tax liability for that taxable year, the amount+that exceeds the Kansas income tax liability could be carried forward for up to ten years.++The bill would also exempt from sales tax purchases of tangible personal property or++services for the purpose of a certified project by a production company that meet the requirements+of the Act. The sales tax exemption would also be extended for any contractor hired for the+construction, reconstruction, enlarging, or remodeling of facilities used for a certified project that+would qualify as a production or postproduction expenditure. The bill includes reporting+requirements for contractors and penalties for the use of the sales tax exemption that is determined+to not be part of this project which would be punishable as a misdemeanor. The contractor would+also be required to pay the retail sales and compensating use tax for materials purchased but not+used or were returned for credit. Failure by the contractor to make the payment would make the+production company liable for payments. The sales tax exemption and income tax credit+provisions of the bill would sunset prior to January 1, 2035.++The Department of Revenue and the Department of Commerce would both have the++authority to write rules and regulations to implement the Act. The Department of Commerce+would be required to submit an annual report to the House Committee on Commerce, Labor and+Economic Development, House Committee on Taxation, Senate Committee on Commerce, and+Senate Committee on Assessment and Taxation. The annual report would include the amounts+and recipients of the tax incentives for the prior fiscal year and to the date of the report, anticipated+tax incentive amounts for the current fiscal year, the production companies that have applied for+and that have been certified for projects, a description of ongoing and completed projects, and the+impact of the projects and the program on the film, video, or digital production industry in Kansas.++The Department of Revenue estimates that HB 2038 would decrease State General Fund++revenues by $10.0 million in FY 2026, and in each future fiscal year through FY 2035. The+Department of Revenue indicates that the Department of Commerce would review and approve+film incentive projects that could be eligible for this new income tax credit program. The+Department of Revenue assumes that the full amount of $10.0 million in allowable credits would+be awarded by the Department of Commerce each fiscal year. The Department of Revenue would++The Honorable Adam Smith, Chairperson+Page 3—HB 2038++issue project exemption certificates for the sale tax exemption component of the film incentive+package. However, the Department of Revenue does not have data on the number of film+productions that would qualify for the sales tax exemption to provide an estimate for this+component of the bill.++The Department of Revenue indicates that it would require a total $170,855 from the State++General Fund in FY 2026 to implement the bill and to modify the automated tax system. The+required programming for this bill by itself would be performed by existing staff of the Department+of Revenue. In addition, if the combined effect of implementing this bill and other enacted+legislation exceeds the Department’s programming resources, or if the time for implementing the+changes is too short, additional expenditures for outside contract programmer services beyond the+Department’s current budget may be required.++The Kansas Department of Transportation (KDOT) indicates that the bill would reduce++state revenues to the State Highway Fund by unknown amounts. KDOT indicates that when the+state receives lower State Highway Fund dollars it may be required to make corresponding+reductions to planned expenditures for projects funded under the comprehensive transportation+plan. The Department of Commerce indicates HB 2038 would not have a fiscal effect on agency+operations. Any fiscal effect associated with HB 2038 is not reflected in++The FY 2026 Governor’s++Budget Report++.++The Kansas Association of Counties and the League of Kansas Municipalities indicate that++the bill has the potential to provide a net reduction to local sales tax collections that are used in+part to finance local governments. However, depending on the overall level of film, video, or+digital media production expenditures, the bill has the potential to increase economic development+and employment opportunities for Kansas communities.++Sincerely,++Adam C. Proffitt++Director of the Budget++cc: Sherry Rentfro, Department of Commerce++Lynn Robinson, Department of Revenue++Brendan Yorkey, Department of Transportation++Wendi Stark, League of Kansas Municipalities++Jay Hall, Kansas Association of Counties++Becky Pottebaum, Board of Regentssearch@@ -5096,116 +343,6 @@Page 2Page 3-- Page 4-- Page 5-- Page 6-- Page 7-- Page 8-- Page 9-- Page 10-- Page 11-- Page 12-- Page 13-- Page 14-- Page 15-- Page 16-- Page 17-- Page 18-- Page 19-- Page 20-- Page 21-- Page 22-- Page 23-- Page 24-- Page 25-- Page 26-- Page 27-- Page 28-- Page 29-- Page 30-- Page 31-- Page 32-- Page 33-- Page 34-- Page 35-- Page 36-- Page 37-- Page 38-- Page 39-- Page 40-- Page 41-- Page 42-- Page 43-- Page 44-- Page 45-- Page 46-- Page 47-- Page 48-- Page 49-- Page 50-- Page 51-- Page 52-- Page 53-- Page 54-- Page 55-- Page 56-- Page 57-- Page 58arrow_upwardTop@@ -5266,4 +403,4 @@© 2026 Kansas State Legislature. All rights reserved.- Data updated 1 hour, 30 minutes ago · 10:42 PM 07/25/2026+ Data updated 53 minutes ago · 5:21 AM 07/29/2026
Diffs are computed deterministically from extracted bill text and show additions, deletions, and section moves. Scanned-PDF text extracted via OCR is flagged where confidence is low; see methodology.