Printable Format79-3703. Compensating use tax imposed; rate. (a) There is hereby levied and there shall be collected from every person in this state a tax or excise for the privilege of using, storing, or consuming within this state any article of tangible personal property. Such tax shall be levied and collected in an amount equal to the consideration paid by the taxpayer multiplied by the rate of 6.5%.
(b) Commencing on January 1, 2023, and thereafter, the state rate on the amount equal to the consideration paid by the taxpayer from the sale of food and food ingredients as provided in K.S.A. 79-3603, and amendments thereto, shall be as set forth in K.S.A. 2023 Supp. 79-3603d, and amendments thereto.
(c) On and after January 1, 2023, 17% and on and after January 1, 2025, 18% of the tax rate imposed pursuant to this section and the rate provided in K.S.A. 2023 Supp. 79-3603d, and amendments thereto, shall be levied for the state highway fund, the state highway fund purposes and those purposes specified in K.S.A. 68-416, and amendments thereto, and all revenue collected and received from such tax levy shall be deposited in the state highway fund.
(d) Within a redevelopment district established pursuant to K.S.A. 74-8921, and amendments thereto, there is hereby levied and there shall be collected and paid an additional tax of 2% until the earlier of: (1) The date the bonds issued to finance or refinance the redevelopment project undertaken in the district have been paid in full; or (2) the final scheduled maturity of the first series of bonds issued to finance the redevelopment project.
(e) All property purchased or leased within or without this state and subsequently used, stored or consumed in this state shall be subject to the compensating tax if the same property or transaction would have been subject to the Kansas retailers' sales tax had the transaction been wholly within this state.
History: L. 1937, ch. 375, § 3; L. 1945, ch. 370, § 2; L. 1953, ch. 450, § 1; L. 1955, ch. 425, § 1; L. 1958, ch. 31, § 3 (Special Session); L. 1965, ch. 533, § 3; L. 1986, ch. 386, § 3; L. 1989, ch. 209, § 61; L. 1992, ch. 280, § 61; L. 1995, ch. 118, § 4; L. 1998, ch. 199, § 15; L. 1999, ch. 158, § 12; L. 2002, ch. 185, § 9; L. 2003, ch. 150, § 3; L. 2004, ch. 90, § 4; L. 2010, ch. 160, § 3; L. 2013, ch. 135, § 4; L. 2015, ch. 99, § 9; L. 2015, ch. 102, § 9; L. 2020, ch. 8, § 14; L. 2022, ch. 89, § 8; January 1, 2023.
Law Review and Bar Journal References:
"2002 Legislative Wrap-Up," Paul T. Davis, 71 J.K.B.A. No. 7, 15 (2002).
Attorney General's Opinions:
Tax imposed on certain vehicles held for resale by licensed vehicle dealer. 84-12.
CASE ANNOTATIONS
1. Airplane plant purchases under government contract not exempt from tax; federal instrumentality. Boeing Airplane Co. v. Commission of Revenue and Taxation, 153 Kan. 712, 715, 113 P.2d 110.
2. Sales and use taxes apply to purchases of equipment for municipal utility. City of Chanute v. Commission of Revenue and Taxation, 156 Kan. 538, 540, 542, 543, 134 P.2d 672.
3. Discussed; consumption in 79-3704, ¶ (a), means direct and immediate consumption. Natural Gas Pipeline Co. v. Commission of Revenue and Taxation, 163 Kan. 458, 459, 462, 464, 465, 469, 183 P.2d 234.
4. Telephone property purchased outside state held taxable; exemptions; act construed. Southwestern Bell Tel. Co. v. State Commission of Revenue and Taxation, 168 Kan. 227, 228, 230, 231, 234, 212 P.2d 363.
5. Barrels purchased outside state and used within state subject to tax hereunder. Consumers Co-operative Ass'n v. State Comm. of Rev. & Taxation, 174 Kan. 461, 464, 466, 256 P.2d 850.
6. Purchases by private corporation for federal government not taxable. General Motors Corporation v. Comm. of Rev. & Taxation, 182 Kan. 237, 242, 320 P.2d 807.
7. Prefabricated houses sold F.O.B. Kansas building site; taxable; act constitutional. Custom Built Homes Co. v. State Comm. of Rev. and Taxation, 184 Kan. 31, 32, 35, 36, 40, 41, 45, 334 P.2d 808.
8. No provision to collect compensating tax from consumer where transaction wholly within state and subject to sales tax. J. G. Masonry, Inc. v. Department of Revenue, 235 Kan. 497, 509, 680 P.2d 291 (1984).
9. Cited; advertising, whether press run or preprinted supplements provided by newspaper or advertiser, is component part of newspaper. In re Appeal of K-Mart Corp., 238 Kan. 393, 394, 400, 710 P.2d 1304 (1985).
10. Cited; transfer of computer software to Bell for operating computerized electronic switching system as not subject to compensating tax examined. In re Tax Appeal of AT&T Technologies, Inc., 242 Kan. 554, 570, 749 P.2d 1033 (1988).
11. Greenhouse operation is an agricultural use for sales tax exemption purposes; KDR regulation partially invalid. In re Tax Appeal of Alex R. Masson, Inc., 21 Kan. App. 2d 863, 865, 909 P.2d 673 (1995).
12. Taxpayer's equipment to load and unload trucks is not exempt from taxation as part of interstate common carrier exemption. In re Tax Appeal of Taylor Crane & Rigging, Inc., 22 Kan. App. 2d 27, 28, 913 P.2d 204 (1995).
13. Kansas compensating tax act (79-3701 et seq.) does not violate the commerce clause of the federal constitution. In re Tax Appeal of Scholastic Book Clubs, Inc., 260 Kan. 528, 533, 920 P.2d 947 (1996).
14. BOTA decision affirmed that Intercard did not have substantial nexus within state to be subject to compensating use tax. In re Appeal of Intercard, Inc., 270 Kan. 346, 14 P.3d 1111 (2000).
15. Kansas lottery, not operator of casino, found to be owner of gaming machines and thus operator was not subject to compensating use tax. In re Tax Appeal of BHCMC, 52 Kan. App. 2d 232, 244, 364 P.3d 1213 (2015).