K.S.A. 79-3287 — Apportionment of net income; sales in state; income-producing activity

Sales, other than sales of tangible personal property, are in this state if:

# (a)

For tax years commencing before January 1, 2027:
(1) The income-producing activity is performed in this state; or
(2) the income-producing activity is performed both in and outside this state and a greater proportion of the income-producing activity is performed in this state than in any other state, based on costs of performance; and

# (b)

for tax years commencing after December 31, 2026, the taxpayer's market for the sales is in this state. The taxpayer's market for the sales is in this state if:
(1) In the case of sale of a service, if and to the extent that the service is delivered to a location in this state;
(2) in the case of intangible property, such property is:
(A) Rented, leased or licensed, if and to the extent that the property is used in this state, if that intangible property utilized in marketing a good or service to a consumer is used in this state, provided that such good or service is purchased by a consumer who is in this state; or
(B) that is sold, if and to the extent the property is used in this state, if:
(i) A contract right, government license or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area is used in this state if the geographic area includes all or part of this state; or
(ii) net gains from intangible property sales that are contingent on the productivity, use or disposition of the intangible property shall be treated as receipts from the rental, lease or licensing of such intangible property under paragraph (2)(A);
(3) in the case of interest from a loan:
(A) Secured by real property, if and to the extent the property is located in this state; or
(B) not secured by real property, if and to the extent the borrower is located in this state; or

# (c)

in the case of dividends, if and to the extent the payor's commercial domicile is located in this state.

# (d)

If the state or states of assignment of receipts under subsection (a)(1) or (2) cannot be determined, the state or states of assignment shall be reasonably approximated. If the state or states of assignment of receipts or net gains cannot be reasonably approximated, such assignment of receipts shall be excluded from the denominator of the sales factor.

# (e)

Notwithstanding the provisions of this section, a communications service provider may assign sales, other than sales of tangible personal property, to this state pursuant to this section as it applied to tax years commencing before January 1, 2027.

# (f)

For purposes of this subsection:
(A) "Communications service" means telecommunications service as defined in K.S.A. 79-3602 , and amendments thereto, internet access as defined in section 1105(5) of the internet tax freedom act, 47 U.S.C. § 151, note, and cable service as defined in 47 U.S.C. § 522(6), or any combination thereof.
(B) "Communications service provider" means any person, corporation, partnership or other entity that provides communications service in this state.