SB 33 — House Substitute for Substitute for SB 33 by Committee on Taxation - Providing that countywide retailers' sales tax is apportioned based on total assessed valuations of the county and cities within the county rather than property taxes levied.

Session of 20252026 House Substitute for Substitute for SENATE BILLNo.

33 By Committee on Assessment and Taxation 2-33-4 AN ACT concerning sales taxation;and compensating use tax;

relating to exemptions;countywide retailers' sales tax;

excludingproviding exemptthat countywide retailers' sales tax is apportioned based on total assessed valuations of certainthe customcounty meatand processingcities serviceswithin fromthe exemptioncounty certificaterather requirements;than property taxes levied;

79-36512025 andSupp. repealing the existing section.

612-192 Beand itrepealing enacted by the Legislatureexisting ofsection. the State of Kansas:

7 Be it enacted by the Legislature of the State of Kansas:

79-36512025 isSupp. hereby amended to read as follows:

79-12-192 3651.is hereby amended to read as follows:

(a)12-192. For the purpose of the proper administration of the Kansas retailers' sales tax act and to prevent evasion of the tax imposed thereunder, it shall be presumed that all gross receipts from the sale of tangible personal property or enumerated services are subject to tax until the contrary is established.

The(a) burdenExcept ofas provingotherwise thatprovided aby salesubsection is(b), not(d) subjector to(h), taxall isrevenue uponreceived by the sellerdirector unlessof thetaxation sellerfrom takesa fromcountywide theretailers' purchasersales antax exemptionshall certificatebe toapportioned among the effectcounty thatand theeach propertycity orlocated servicein purchasedsuch iscounty notin subjectthe tofollowing tax.manner:

(b) An(1) exemption(A) Prior certificateto shallJanuary relieve1, the2028, seller/ from2f collectingall andrevenue remittingreceived taxby if the sellerdirector hasof obtainedtaxation shall be apportioned among the requiredcounty identifyingand informationeach ascity determinedlocated byin such county in the director,proportion fromthat the purchasertotal andtangible property tax levies made in such county in the reasonpreceding year for claimingall thefunds exemptionof ateach such governmental unit bear to the timetotal of purchaseall andsuch haslevies maintainedmade properin recordsthe ofpreceding exemptyear, transactionsexcept that the apportionment pursuant to subsectionthis (a)provision the provisions of K.S.A.this paragraph shall not change between July 1, 2025, and December 31, 2026 2027;

79-3609(a),and (B) on and amendmentsafter thereto,January and1, provided2028, them/ too2 all revenue received by the director whenof requested,taxation exceptshall be apportioned among the county and each city located in such county in the proportion that nothe total assessed valuation of each such reliefcounty fromand liabilitycity shallwithin applythe county bears to athe sellersum who:of the total assessed valuations of all such governmental units within the county;

Fraudulentlyand fails(2)  / 2f all revenue received by the director of taxation from such countywide retailers' sales tax shall be apportioned among the county and each city located in such county, first to collectthe county that portion of the tax;revenue equal to the proportion that the population of the county residing in the unincorporated area of the county bears to the total population of the county, and second to the cities in the proportion that the population of each city bears to the total population of the county, except that no persons residing within the Fort Riley military reservation shall be included in the determination of the population of any city located within Riley county.

solicitsAll purchasersrevenue apportioned to participatea incounty shall be paid to its county treasurer and shall be credited to the unlawfulgeneral claimfund of anthe exemption;county.

acceptsH anSub exemptionfor certificateSub claimingSB an33 entity2 based(b) exemption(1) In whenlieu of the subjectapportionment offormula theprovided transactionin issubsection actually(a), all revenue received by the purchaserdirector atof taxation from a locationcountywide operatedretailers' bysales thetax sellerimposed andwithin Johnson county at the directorrate providesof an0.75%, exemption1% certificateor that1.25% clearlyafter andJuly affirmatively1, indicates2007, thatshall be apportioned among the claimedcounty exemptionand iseach notcity available.located in such county in the following manner:

The(A) The sellerrevenue shallreceived obtainfrom the samefirst information0.5% forrate proof of atax claimedshall exemptionbe regardlessapportioned ofin the mediummanner inprescribed whichby thesubsection transaction(a); occurred.

Theand purchaser(B) the improperlyrevenue claimingreceived anfrom exemptionthe shallrate remainof liabletax forexceeding the0.5% nonpaymentshall ofbe tax.apportioned as follows:

(c) The(i)  exemption/4shall certificatebe shallapportioned beamong substantiallythe county and each city located in such formcounty asin the directorproportion maythat prescribe.the total tangible property tax levies made in such county in the preceding year for all funds of each such governmental unit bear to the total of all such levies made in the preceding year;

The(ii)  seller/4shall shallbe useapportioned among the standardcounty formand foreach claimingcity anlocated exemptionin electronicallysuch ascounty, adoptedfirst byto the director.county that portion of the revenue equal to the proportion that the population of the county residing in the unincorporated area of the county bears to the total population of the county, and second to the cities in the proportion that the population of each city bears to the total population of the county;

Aand seller(iii)  may/2shall requirebe aretained purchaserby to provide a copy of the purchaser'scounty sales tax Sub SB 33 2 registration certificate with a resale certificate as a condition for honoring the purchaser's resale exemption claim, except that in the case of drop shipment sales into this state, the third party vendor may claim a resale exemption based on an exemption certificate provided by its customer,sole re-use seller, or any other information acceptable to the secretary available to the third party vendor evidencing qualification for a resale exemption, regardless of whether the customer, re-seller, is registered to collect and remitbenefit. sales and use tax in this state.

A(2) In purchaserlieu isof notthe requiredapportionment toformula provideprovided ain signaturesubsection to(a), claimall anmoney exemptionreceived by the director of taxation from a countywide sales tax unlessimposed awithin paperMontgomery exemptioncounty certificatepursuant isto used.the election held on November 8, 1994, shall be remitted to and shall be retained by the county and expended only for the purpose for which the revenue received from the tax was pledged.

AAll sellerrevenue isapportioned relievedand paid from the imposition of liabilitysuch fortax to the taxtreasurer otherwiseof applicableany ifcity itprior obtainsto athe blanketeffective exemptiondate certificateof this act shall be remitted to the county treasurer and expended only for athe purchaserpurpose withfor which the sellerrevenue hasreceived afrom recurringthe businesstax relationship.was pledged.

Such(3) In blanketlieu certificateof needthe notapportionment beformula renewedprovided orin updatedsubsection by(a), on and after the sellereffective fordate exemptionof certificatethis informationact, orall datamoneys elementsreceived whenby therethe isdirector of taxation from a recurringcountywide businessretailers' relationshipsales betweentax imposed within Phillips county pursuant to the buyerelection held on September 20, 2005, shall be remitted to and seller.shall be retained by the county and expended only for the purpose for which the revenue received from the tax was pledged.

For(c) purposes(1) Except as otherwise provided by paragraph (2) of this subsection, afor recurringpurposes businessof relationshipsubsections exists(a) whenand a(b), periodthe term "total tangible property tax levies" means the aggregate dollar amount of notax morerevenue thanderived 12from monthsad elapsesvalorem betweentax saleslevies transactions.applicable to all tangible property located within each such city or county.

(d) ToThe lawfullyad presentvalorem aproperty resaletax exemptionlevy certificate the purchaser must be engaged in the business of sellingany propertycounty or servicescity ofdistrict theentity sameor kindsubdivision thatshall isbe purchased,included holdwithin a registration certificate, except as otherwise permitted in subsection (c) for drop shipment sales into this state,term andif at the timelevy of purchase,any eithersuch intenddistrict toentity resellor thesubdivision propertyis inapplicable theH regularSub coursefor ofSub businessSB or33 be3 unable to ascertainall whethertangible the property willlocated bewithin resoldeach orsuch usedcity foror somecounty. other purpose.

A(2) For resalethe exemptionpurposes certificateof maysubsections be(a) usedand (b), any ad valorem property tax levied on property located in a city in Johnson county for resalethe purpose of servicesproviding tofire tangibleprotection personalservice in such city shall be included within the term "total tangible property andtax notlevies" for servicessuch city regardless of its applicability to realall property.tangible property located within each such city.

(e) AnyIf personthe whotax issuesis alevied resaleby certificatea ordistrict otherwhich exemptionextends certificateacross incity orderboundaries, tofor unlawfullypurposes avoid payment of taxthis forcomputation, businessthe oramount personalof gainsuch levy shall be guiltyapportioned ofamong aeach misdemeanorcity andin uponwhich convictionsuch shalldistrict beextends punishedin bythe aproportion finethat ofsuch nottax morelevied thanwithin $1,000each orcity imprisonmentbears forto notthe moretotal thantax onelevied year, or by both.the district.

In(d) addition,(1) All ifrevenue thereceived directorfrom determines that a personcountywide issuedretailers' asales resale certificate in order to unlawfully avoid payment of tax forimposed businesspursuant orto personal gain, the director shall increase any penalty that is due from the person under K.S.A.

79-3615,12-187(b)(2), (3)(C), (3)(F), (3)(G), (3)(I), (6), (7), (8), (9), (12), (14), (15), (16), (17), (18), (19), (20), (22), (23), (25), (27), (28), (29), (30), (31), (32), (33), (34), (35), (36), (37), (38), (39), (40) and (41), and amendments thereto, byshall $250be orremitted 10to timesand shall be retained by the taxcounty due,and whicheverexpended isonly greater,for onthe eachpurpose transactionfor wherewhich the misuserevenue ofreceived afrom resalethe certificatetax occurred.was pledged.

(f) Exemption(2) Except certificatesas issuedotherwise byprovided anin entity claiming a specific exemption under K.S.A.

79-3606,12-187(b)(5), and amendments thereto, basedall onrevenues thereceived statusfrom ofa thecountywide entityretailers' shallsales beartax theimposed name, address of the entity and identification number issued to the entity pursuant to K.S.A.

79-3692,12-187(b)(5), and amendments thereto.thereto, shall be remitted to and shall be retained by the county and expended only for the purpose for which the revenue received from the tax was pledged.

Such(3) All certificaterevenue shallreceived befrom signeda bycountywide anretailers' authorizedsales person of the nonprofit entity, if in paper form, and contain the tax identificationimposed numberpursuant ofto theK.S.A. entity.

The12-187(b)(26), certificateand amendments thereto, shall be substantiallyremitted into Suband SBshall 33be 3retained suchby formthe ascounty and expended only for the directorpurpose mayfor prescribe.which the revenue received from the tax was pledged unless the question of imposing a countywide retailers' sales tax authorized by K.S.A.

A12-187(b)(26), sellerand mayamendments requirethereto, thatincludes payments be made on an exempt entity's check, warrant, voucher or charged to the entity'sapportionment accountof asrevenue aprescribed conditionin forsubsection honoring(a). the entity's exemption claim.

(g) It(e) All shallrevenue beapportioned to the dutyseveral cities of everythe personcounty whoshall purchasesbe tangiblepaid personalto propertythe orrespective servicestreasurers thatthereof areand taxabledeposited underin this act to pay the fullgeneral amountfund of tax that is lawfully due to the retailercity. making the sale.

AnyWhenever personthe whoterritory willfullyof any city is located in two or more counties and intentionallyany refusesone toor paymore of such taxcounties do not levy a countywide retailers' sales tax, or whenever such counties do not levy countywide retailers' sales taxes at a uniform rate, the revenue received by such city from the proceeds of the countywide retailers' sales tax, as an alternative to depositing the retailersame shallin the general fund, may be guiltyused for the purpose of areducing misdemeanorthe andtax levies of such city upon convictionthe shalltaxable betangible punishedproperty andlocated finedwithin asthe providedcounty bylevying subsectionsuch (g)countywide ofretailers' K.S.A.sales tax.

79-3615(h),(f) Prior andto amendmentsMarch thereto.1 of each year, the secretary of revenue shall advise each county treasurer of the revenue collected in such county from the state retailers' sales tax for the preceding calendar year.

(h) OnH andSub afterfor JulySub 1,SB 2024,33 notwithstanding4 any(g) Prior provisions to December 31 of each year, the contraryclerk inof thisevery sectioncounty orimposing anya othercountywide provisionretailers' sales tax shall provide such information deemed necessary by the secretary of law,revenue purchasersto claimingapportion anand exemptionremit revenue to the counties and cities pursuant to K.S.A.this section.