Kansas Attorney General Opinion 1992-126

ROBERT T. STEPHAN
ATTORNEY GENERAL
October 6, 1992
ATTORNEY GENERAL OPINION NO. 92- 126
Robert L. Farmer
Fort Scott City Attorney
One East Third Street
Fort Scott, Kansas 66701
Re: Taxation--Kansas Retailers' Sales Tax--
Exemptions
Synopsis: Non-profit commercial enterprises that meet the
requirements of section 3 of the enterprise zone
act are eligible for the sales tax exemption
provided by K.S.A. 1991 Supp. 79-3606(ee), as
amended. Cited herein: K.S.A. 2-2602; 2-3001;
12-17,108 (repealed, L. 1992, ch. 202, § 15);
K.S.A. 1991 Supp. 32-964, as amended by L. 1992,
ch. 292, § 1; 74-8103, as amended by L. 1992,
ch. 221, § 3; 79-3271; K.S.A. 79-32,153;
79-34,108, as amended by L. 1992, ch. 106, § 30;
K.S.A. 1991 Supp. 79-3606, as amended by L. 1992,
ch. 202, § 13; K.S.A. 79-4301, Art. IV; L. 1992,
ch. 202, §S 2, 3.
Dear Mr. Farmer:
You request our opinion regarding sales tax exemption under
the new Kansas enterprise zone act. Specifically you inquire
whether a non-profit corporation can qualify for such an
exemption.
Previously K.S.A. 1991 Supp. 79-3606(ee) authorized a sales
tax exemption for property and services used in constructing,

reconstructing, enlarging or remodeling a qualified business
facility located within an enterprise zone if that business
facility qualified for an income tax credit under K.S.A.
79-32,153. You state that since non-profit corporations do
not pay income taxes, they do not qualify for an income tax
credit and thus could not qualify for a sales tax exemption
under K.S.A. 1991 Supp. 79-3606(ee).
The 1992 legislature removed the income tax credit
qualification requirement from K.S.A. 1991 Supp. 79-3606(ee),
amending the statute to read as follows:
"The following shall be exempt from the
tax imposed by this act:
"(ee) all sales of tangible personal
property or services purchased for the
purpose of and in conjunction with
constructing, reconstructing, enlarging or
remodeling a business, or retail business
which meets the requirements established
in section 3 and amendments thereto, and
the sale and installation of machinery and
equipment purchased for installation at
any such business or retail business. . .
." K.S.A. 1991 Supp. 79-3606, as amended
by L. 1992, ch. 202, § 13.
Section 3 of the bill sets forth the requirements for
eligibility for this sales tax exemption for manufacturing,
nonmanufacturing and retail businesses. You focus on the
requirements for a nonmanufacturing business, so we will do
the same. Section 3(b) provides as follows:
"(b) A nonmanufacturing business may be
eligible for a sales tax exemption under
the provisions of subsection (ee) of
K.S.A. 79-3606, and amendments thereto, if
the nonmanufacturing business complies
with the following requirements:
"(1) A nonmanufacturing business shall
provide documented evidence of job
expansion involving the employment of at
least five additional full-time employees;
and

"(2) a nonmanufacturing business
located within the state of Kansas that
has documented evidence of job expansion
as provided in paragraph (1), which
relocates in another city or county within
the state of Kansas must receive approval
from the secretary [of commerce and
housing] prior to qualifying for the sales
tax exemption in subsection (ee) of K.S.A.
79-3606, and amendments thereto, except
that approval by the secretary shall not
be required if the nonmanufacturing
business relocates within the same city."
L. 1992, ch. 202, § 3.
"Nonmanufacturing" business is defined in section 2 as "any
commercial enterprise other than a manufacturing business or a
retail business." L. 1992. ch. 202, § 2(e). Thus, if a
non-profit corporation is a "commercial enterprise" and meets
the requirements of section 3(b), it would qualify for the
sales tax exemption in K.S.A. 1991 Supp. 79-3606(ee).
"Commercial enterprise" is not defined in the enterprise zone
act. The word "commercial" is used in several terms that are
defined in Kansas statutes, none of which imply a for-profit
limitation. See K.S.A. 2-2602; 2-3001; K.S.A. 1991 Supp.
32-964, as amended by L. 1992, ch. 292, § 1; 79-3271; K.S.A.
79-34,108, as amended by L. 1992, ch. 106, § 30; 79-4301,
Art. IV. "Commercial" is defined generally as follows:
"Relates to or is connected with trade and
traffic or commerce in general; is
occupied with business and commerce.
(Citation omitted). Generic term for most
all aspects of buying and selling."
Black's Law Dictionary 245 (5th Ed. 1979).
"Commerce" is defined as:
"The exchange of goods, productions, or
property of any kind; the buying, selling,
and exchanging of articles." Blacks at
244.
"Enterprise" is defined generally as:

"A venture or undertaking especially one
involving financial commitment. . . ."
Black's at 476.
Again, there is no implied for-profit requirement. See
also K.S.A. 1991 Supp. 74-8103(e), as amended by L. 1992,
ch. 221, § 3; K.S.A. 12-17,108 (repealed, L. 1992, ch.
202, § 15). In our opinion, the term commercial enterprise
may be defined broadly to include non-profit corporations
engaged in trade. See Daughters of St. Paul, Inc. v.
Zoning Board of Appeals, 17 Conn. App. 53, 58 (1988);
Clem v. Christole, Inc., 582 N.E.2d 780, 786 (Ind.
1991).
Very truly yours,
ROBERT T. STEPHAN
Attorney General of Kansas
JuleneL.Miller
Deputy Attorney General
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