Kan. Stat. Ann. § 79-3606

Section 79-3606(b) considers the future use of building materials when deciding whether the governmental sales tax exemption applies to purchases for a taxable business.

Board of Park Commissioners v. State ex rel. Arnold · filed 1973-07-14(b)

Application of K. S. A. 1970 Supp. 79-3606 (b) to both consumables and building materials necessitates consideration of their future use as well as immediate use at time of purchase. This was the intent of the 1970 statute, which was clarified by 1971 amendments.

Section 79-3606(d) requires a project exemption certificate for a contractor to purchase materials tax-free for a political subdivision’s project, even when the contractor has no direct contract with the subdivision.

In Re Tax Appeal of Harbour Brothers Constr. Co. · filed 1994-11-04(d)

Neither the statute nor the regulations on project exemption certificates make any distinction among contractors, subcontractors, or repairmen based on whether they have a direct contract with the political subdivision. ... Because Harbour did not have a project exemption certificate for the Sandstone project, it was not entitled to purchase its materials for the project exempt from sales tax.

Section 79-3606(m) exempts manufacturing materials that are consumed or dissipated within the time reasonably needed to complete production, including film, lithoplates, and developer used to print directories.

R. L. Polk & Co. v. Armold · filed 1974-11-02(m)

The entire process of manufacture occurs over a relatively short period of time, during which some consumption or dissipation takes place and after which the property or materials are rendered useless for all practical purpose. The manufacture is accomplished within a time reasonably requisite. Accordingly, we hold that the items are shown to have been immediately consumed within the purview of the exemption statute.

Section 79-3606(m)'s component-part exemption covers advertising supplements incorporated into newspapers, including supplements supplied by advertisers.

In Re the Appeal of K-Mart Corp. · filed 1985-12-06(m)

Advertising, whether run of the press, preprinted supplements provided by the newspaper or preprinted supplements provided by the advertiser, is a component part of the newspaper and we so hold.

Section 79-3606(n) does not exempt drill bits that may be reused in another well or casing and cement that remain part of the well.

In Re the Appeal of Angle · filed 1986-01-30(n)

Because drill bits may be used in the drilling of more than one well, this language appears to speak specifically against the application of the exception in this instance. ... It cannot be said, therefore, that the casing and cement were consumed in the drilling process itself. ... For the foregoing reasons, we hold that the district court did not err in finding that drill bits, casing and cement were not exempt from taxation under K.S.A. 79-3606(n).

Section 79-3606(n) exempts catalysts consumed in refining; regeneration and reuse during the process do not prevent a catalyst from being immediately consumed.

In Re Tax Appeal of Derby Refining Co. · filed 1992-08-28(n)

The statute does not prohibit a finding that a catalyst is “consumed” in the refining process. The statute indicates a decision to exempt “consumables” as a class rather than through a listing of specific items. The general class defined does not exclude “catalyst” if the facts show it to be property which was “consumed” in the process.

Section 79-3606(n) exempts electricity used to blend, clean, dry, and aerate grain as property consumed in processing, refining, or compounding tangible personal property.

In Re Tax Appeal of Collingwood Grain, Inc. · filed 1995-03-10(n)

Electricity used by the taxpayers in blending, cleaning, drying, and aerating again is construed to be exempt from taxation under K.S.A. 79-3606(n) as property consumed in the “production, manufacture, processing, . . . refining or compounding of tangible personal property.”

Section 79-3606(n) exempts electricity used to pressurize water to pumping stations when that pressurization is an integral part of producing the water for sale.

In Re Appeal of Water Dist. No. 1 of Johnson County · filed 1999-08-13(n)

In short, Collingwood Grain, K.A.R. 28-15-18(g), and the legislative history of K.S.A. 79-3606(n) clearly require the conclusion ... that the electricity used in pressurizing Taxpayer’s water to the pumping stations is tax exempt.

Section 79-3606(m) and (n) do not exempt a health club’s purchases that it consumes to maintain its facilities rather than consuming them in, or making them a component of, the taxable services sold to members.

In Re the Appeals of Genesis Health Clubs · filed 2009-07-02

Genesis Health Clubs (Genesis) appeals a summary judgment entered against it by the Kansas Board of Tax Appeals (BOTA), holding that certain purchases of tangible personal properly were not consumed in the providing of taxable services and therefore not exempt under K.S.A. 2008 Supp. 79-3606(n) and that such purchases also did not become an ingredient or component part of taxable services and therefore not exempt under K.S.A. 2008 Supp. 79-3606(m). We agree with BOTA and affirm the judgment against Genesis.

Section 79-3606(n) exempts electricity used to power dedicated HVAC units when the electricity is essential to and consumed in providing telecommunication services.

In re Tax Appeal of Southwestern Bell Tel. Co. · filed 2020-01-24(n)

In other words, under the plain language of K.S.A. 2018 Supp. 79-3602(dd)(2), the electricity used to power these dedicated units is "essential or necessary to" and "used in the actual process of" providing Southwestern Bell's telecommunication services. Thus, this electricity is exempt from sales tax under K.S.A. 2018 Supp. 79-3606(n).

The isolated or occasional sales exemption does not cover a finance company's recurring retail sales of repossessed property.

Personal Thrift Plan of Wichita, Inc. v. State · filed 1981-06-10(l)

We agree. The repossession of personal property and its subsequent disposal is certainly a part of the business of a finance company. A substantial part of such disposition was through retail sales. These sales cannot be considered to be “nonrecurring.”

Section 79-3606(c) extends the educational institution sales tax exemption to an association that acts as an extension of its member colleges and universities.

National Collegiate Athletic Ass'n v. Kansas Department of Revenue · filed 1989-10-27(c)

We must conclude that the NCAA is but an extension of the member universities and colleges and there is no legislative intent that the extension should be denied the exemption available to the member colleges and institutions.

Section 79-3606(aa) does not exempt materials used to repair railroad work cars that support, but are not themselves used in, interstate commerce.

In re the Tax Appeal of Atchison, Topeka & Santa Fe Railway Co. · filed 1993-01-08(aa)

The railroad work cars themselves are not used to transport people or goods in interstate commerce. The cars are used to do work so other ears can be used for such purposes. The materials in question are used to repair the work cars. This is too far removed to include the materials under the definition of “for use in interstate . . . commerce.”

Section 79-3606 lists no general sales tax exemption for sales by Indian retailers.

Kaul v. Robert T. Stephan, Attorney General · filed 1996-04-30

Regarding K.S.A. § 79-3615; the provision which enumerates the type of sales that are excluded from the Kansas Retailers’ Sales Tax Act’s provisions nowhere refers to sales by Indian retailers among its scores of exemptions. See K.S.A. § 79-3606(a)-(ss).

Section 79-3606(kk) exempts transportation equipment used in manufacturing only when it is used at the plant or facility; equipment used to manufacture elsewhere is taxable.

In Re the Tax Appeal of Geiger Ready Mix Co. · filed 1998-05-08(kk)(3)(C)

In reconciling the various provisions of the statute, we hold that if the manufacturing process takes place at a location other than the plant or facility, then such machinery and equipment is not exempt from sales tax and that only transportation equipment that is used at the plant or facility during the manufacturing process is exempt from taxation.

Section 79-3606(kk) does not exempt machinery and equipment used in a manufacturing process that takes place outside the plant or facility.

In Re Tax Appeal of Western Resources, Inc. · filed 2006-04-28(kk)

K.S.A. 79-3606(kk) must be interpreted strictly because it is a tax exemption statute and, under such an interpretation, if the manufacturing process takes place at a location other than the plant or facility, the sale of machinery and equipment which perform that process is not exempt from sales tax.

Section 79-3606(kk)(2)(D)(i) exempts oil and gas processing equipment only when it treats or prepares oil or gas after extraction from the earth; extraction equipment does not qualify.

In Re the Appeals of Edmiston Oil Co. · filed 2012-01-13(kk)(2)(D)(i)

But the statute includes as such processing only those operations where the oil or gas “that has been extracted from the earth” is subjected to such listed treatments or preparations. Our scrutiny of the uncontroverted facts fails to convince us that oil or gas “has been extracted” before it reaches the earth's surface, or that any of the listed treatments occur prior to the oil or gas actually reaching the surface. Thus, we conclude that the down-hole machinery and equipment, together with the pumping unit and related accessories, fail to satisfy the statutory exemption scheme.

Section 79-3606(kk)(2)(C) includes contiguous areas of a single, fixed manufacturing site where integrated production operations occur within the plant or facility.

In Re the Appeal of LaFarge Midwest/Martin Tractor Co. · filed 2012-03-02(kk)(2)(C)

The legislature obviously intended the defined boundaries of a manufacturing or processing plant or facility to extend beyond the area immediately surrounding the production line if there are contiguous areas at the single, fixed location where integrated production operations are conducted.