**Kansas Liquor Drink Tax Statutes (K.S.A. 79-41a01 et seq.) – Full Analysis**
The Kansas **liquor drink tax** is a 10% excise tax on the sale of alcoholic drinks (including cereal malt beverage) at licensed clubs, caterers, drinking establishments, public venues, and temporary permit holders. It is **not** the same as the separate gallonage tax on wholesale liquor or the general retailers’ sales tax (drinks subject to this tax are exempt from sales tax). The tax was enacted in 1979 following the constitutional change allowing liquor-by-the-drink sales.
### 1. Definitions & Imposition (K.S.A. 79-41a01–79-41a02)
- **Alcoholic liquor** includes everything defined in K.S.A. 41-102 plus cereal malt beverage (K.S.A. 41-2701).
- **Tax rate**: 10% on **gross receipts** derived from the sale of alcoholic liquor (or acquisition cost of free samples). The consumer pays it; the licensee collects and remits it.
- Payment is monthly (due by the 25th of the following month), with detailed reporting and record-keeping requirements. The Kansas Department of Revenue administers and enforces it like the retailers’ sales tax.
### 2. State-Level Distribution of Revenue (K.S.A. 79-41a03(d))
When the state treasurer receives the revenue:
- **25%** → State General Fund (unrestricted).
- **5%** → Community Alcoholism and Intoxication Programs Fund (state-level alcohol/drug programs).
- **70%** → Local Alcoholic Liquor Fund (created in 79-41a04(a)).
Special rules apply for sales at the Kansas State Fairgrounds or within certain STAR bond districts (up to 100% can go to bond debt service).
### 3. Local Allocation (K.S.A. 79-41a04(b)–(c))
The **local alcoholic liquor fund** money is distributed quarterly to cities and counties based on **where the tax was collected**:
- **Cities > 6,000 population**: 70% of tax collected inside city limits.
- **Cities ≤ 6,000 population**: 46⅔% of tax collected inside city limits.
- **Counties**:
- 70% of tax collected in unincorporated areas.
- 23⅓% of tax collected inside cities ≤ 6,000 population.
- Railway-car drinking establishments have a special equal-share rule among qualifying counties.
Distributions go directly to city or county treasurers (March 15, June 15, Sept. 15, Dec. 15).
### 4. Mandatory Use Restrictions – The “Intended Use” Provisions (K.S.A. 79-41a04(d)–(e))
This is the **core of any “Project Otis”–style argument** about proper accounting and spending. The statute is **highly prescriptive**:
**For cities > 6,000 population** (e.g., Topeka):
- Deposit full amount received.
- Credit **exactly ⅓** to city **general fund** (unrestricted use).
- Credit **⅓** to a **special parks and recreation fund** → may be spent **only** for “purchase, establishment, maintenance or expansion of park and recreational services, programs and facilities.”
- Credit **⅓** to a **special alcohol and drug programs fund** → may be spent **only** for services/programs whose **principal purpose** is:
- Alcoholism and drug abuse prevention and education,
- Alcohol and drug detoxification,
- Intervention in alcohol and drug abuse, or
- Treatment of alcoholics/drug abusers (or those in danger of becoming so).
**For counties** (including Shawnee County) and small cities:
- Slightly different math (extra 23⅓% of small-city collections must go straight to the county’s alcohol/drug fund).
- Of the **remainder**: **⅓ general fund**, **⅓ special parks & recreation fund** (same restricted use as above), **⅓ special alcohol & drug programs fund** (same strict “principal purpose” test).
- In counties with an **alcohol and drug advisory committee**, the board of commissioners **must request and generally follow** the committee’s recommendations on alcohol/drug fund expenditures (unless overridden by unanimous vote).
Moneys in the special funds are under the direction of the governing body, but the statute explicitly limits their use. There are narrow exceptions (e.g., Butler County has a community support/domestic violence option).
### 5. Key Takeaways & Relation to Shawnee County / Project Otis
- The statute **does** codify an “intended use” framework: roughly one-third of local revenue is unrestricted (general fund), but the other two-thirds are **ring-fenced** for parks/recreation and especially alcohol/drug prevention/treatment.
- Local governments **must** maintain the special funds and can be audited for compliance. The “principal purpose” language for the alcohol/drug fund is intentionally narrow.
- Shawnee County receives its statutory share (~$2.1 million annually cited in public comments) and is subject to the county-specific split in 79-41a04(e). Topeka (as a large city) follows the city rules.
- **Project Otis** (the ongoing citizen advocacy effort) focuses on accountability for these funds—particularly whether the county is properly allocating, tracking, and spending the alcohol/drug and parks portions versus folding everything into general spending or other priorities. The statutes provide a clear legal benchmark for that debate, though they do **not** create a specific “Project Otis” or name any particular project.
- No major statutory changes have altered these core splits or restrictions in recent years (statutes current as of 2026).
In short, the law is **not** silent on use—it deliberately directs a significant portion of the revenue back into alcohol-related services and parks while giving local governments flexibility with the general-fund slice. Any claim of misuse would turn on whether the special funds are being maintained and spent in accordance with the “principal purpose” and parks-only rules. For the most current county budget documents or audits showing actual expenditures, check Shawnee County’s official financial reports or recent commission meeting packets.