Your voice in the hopsitality industry!

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2013 New Member Guide

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The Kansas Restaurant and Hospitality Association, founded in 1929, is the leading business association for restaurants, hotels, motels, country clubs, private clubs, and allied business in Kansas. Along with the Kansas Restaurant and Hospitality Association Education Foundation, the association works to represent, educate and promote the rapidly growing industry of hospitality in Kansas.

Our Mission

About Us The accomplishments of the Kansas Restaurant & Hospitality Association (KRHA) are very impressive. This is due to our members who have taken on the responsibility to support and advocate for our industry.

The KRHA works very hard to represent the members of the Association legislatively. On a daily basis, members of Congress and Kansas legislature consider changing laws and regulations on topics such as immigration, obesity, menu labeling, taxes, and building depreciation. KRHA actively lobbies, on average, 35 bills and monitors another 170 bills of interest to our industry. In 2008, the KRHA and the lobbying team successfully opposed efforts to increase food service licensure fees by $1.7 million dollars, which would have equated to an increase of $300.00 for a business with Gross Annual Sales of $250,001 - $500,000. We also successfully fought a $290,000 increase proposed by KDHE in lodging licensure fees. This would have amounted to an increase of approximately $1,570 for establishments with 200 rooms. In 2009, the KRHA opposed and closely monitored the proposed “Employee Free Choice Act”, also known as the “Card Check” bill.. In 2010, KRHA President & CEO testified on payment options for the recent unemployment tax rate increase that had placed much hardship upon our industries businesses. KRHA defeated the enactment of the sugared beverage tax and the increase of liquor and CMB taxes. Despite the contentious budget debate, the 2011 Legislation Session proved to be successful. Some of the priority bills that passed were: Workers Compensation Reform, Unemployment Insurance Reform, Lodging Fees and Sales Tax Provisions. For 2012 a few of our priority issues we were monitoring were: Venue Licensing, Proportionate Drink Pricing Repeal and Background checks on Those to Serve Alcohol.Membership is what gives the industry strength. Allow us to be “Your Voice in the Hospitality Industry” Please make a commitment to do your share. By becoming a member, you help us stay focused on issues that affect your bottom line, and plan for the future. Now is the time to make sure we maintain and continue to grow our membership, increase our involvement with legislative issues, and prepare for the opportunities ahead.

Please think about some of the key issues we are facing in this industry and how you might become involved with the KRHA. We look forward to working with you and thank each of you for your support. If you have any questions and/or concerns, please contact the KRHA office.

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ADVOCACY- KRHA carefully monitors industry legislation at the state and federal levels of government and ensures our collective voice is heard. Support at the city and county levels is available upon request. - Our registered lobbyist directly represent the interests of our members with the Kansas Legislature and National Restaurant Association lobbyist do so with congress.- Political updates with KRHA’s weekly Capitol News (during session) and NRA Washington Weekly.

EDUCATION AND TRAINING- Workforce development is accomplished through ServSafe Food Safety and Alcohol server instruction and other training programs. Members receive significant discounts on all ServSafe materials.- School-to-career programs and scholarships sponsored by KRHA assist students with career opportunities in the foodservice and lodging industries.

COMPETITIVE RATES ON WORKERS’ COMPENSATION/PROPERTY & CASUALTY INSURANCE- Specialized for the foodservice and lodging industries.- Member-owned workers’ compensation self-insurance fund provides competitive rates and an opportunity to receive dividends. - Full-time insurance agents, as well as claims and loss control specialists on staff.- KRHA contracts with the finest property and casualty insurance carriers available.

Membership Benefits & Services

STOP AND READ THIS IMMEDIATELY!!!For new members interested in our KRHA sponsored Health Insurance, your 30 day open enrollment period has begun! The first 30 days of your KRHA membership constitutes your open enrollment period for our KRHA sponsored health insurance program through Preferred Health Systems and their subsidiary companies, Preferred Health Systems Insurance Company and Preferred Plus of Kansas. This means your business may be eligible to enroll free of underwriting beginning the start date of your membership and ending 30 days thereafter.If you do not sign up in the next 30 days:THE NEXT OPEN ENROLLMENT PERIOD FOR ALL CURRENT KRHA MEMBERS WILL BE:JAN. 15TH TO MAR. 1st, 2013For more information about our plans and its rules and regulations contact Adam Mills at the KRHA Office, (316) 267-8383

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AFFORDABLE HEALTH INSURANCE- Alternatives to meet your objectives and budget including: Traditional Health Insurance Plans, and high deductible plans coupled with Health Savings Accounts, and Limited Medical Indemnity Benefit Plans.- Have your small business rated like a large group by being pooled with all KRHA members. 100% guaranteed acceptance with no pre-existing conditions, and afford-able age banded rates.

DISCOUNTS ON CREDIT CARD AND PAYROLL SERVICES- KRHA has partnered with Heartland Payment Systems (HPS) to provide members with the best value in credit card processing available in the marketplace. Local managers, 24/7 help desk, and three-year rate guarantees are standard in the HPS program.- Members receive exclusive discounts on credit card processing, gift card marketing, payrol and tip management services and check management.

DISCOUNTS ON MUSIC LICENSING- BMI offers KRHA members an ongoing 10% discount and an additional 10% dis-count for remitting a check within 30 days of annual renewal.- KRHA members receive similar discounts for ASCAP licensing.

DUAL MEMBERSHIP WITH NATIONAL RESTAURANT ASSOCIATION (NRA) - KRHA retail members enjoy a FREE dual membership in the NRA.- Free industry research services, discounted NRA publications, complimentary NRA Restaurant Show admission, and much more. Visit www.restaurant.org for details.

ADDITIONAL KRHA MEMBERSHIP BENEFITS- Reduce recruitment costs through KRHA partner, Career Builder- Pertinent ongoing industry communications through bi-weekly emails or FAX, and quarterly newsletters.- FREE Annual Membership Directory and Buyer’s Guide - Discounted email marketing service and access to free marketing webinars through Fishbowl.- Discounts on advertising in KRHA publications.

ALLIED MEMBERSHIP BENEFITSIn addition to the above benefits and services, allied members also receive the following benefits:- KRHA member mailing list by email or on a computer disk upon request.- Company name in Allied section of KRHA Annual Membership Directory & Buyer’s Guide.- Political clout dealing with legislative special interests of mutual concern to the restaurant and lodging industries.- Kansas Restaurant & Hospitality Association logo decal to display and use in advertising.- Referrals of products and services to inquiries.

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Eating and Drinking Establishments - 7,260 in 2011 Lodging Establishments - 608 Employees - 126,400 2011 Industry Sales - 3.6 Billion Projected Job Growth by 2021 - 9.3% increase

KRHA PositionsAlcoholBlood Alcohol ContentCurrent law provides that at a blood alcohol content of .08, the individual is presumed to be operating under the influence and constitutes a per se violation under DUI laws. Should the .08 level of alcohol in the blood be decreased?

KRHA Position: KRHA opposes further reduction in the blood alcohol content (BAC) below .08. Adopted 1/11/2001

Cash Deposit for 10% Alcohol Excise TaxKRHA Position: KRHA supports the prohibition of an advance deposit to guarantee payment of the 10% alcohol

excise tax for businesses that have established a reputation for timely payment of the tax. Adopted: 1-11-2001, Rev. 1/15/2003

Dram Shop LawsShould legislation be enacted making restaurants, bars, or other facilities that serve alcoholic beverages liable criminally or civilly for actions of persons purchasing such beverages?

KRHA Position: KRHA opposes dram shop legislation, which contains onerous provisions detrimental to KRHA member industries, while working with the legislature and other alcohol industry parties to develop a bill with language that would be acceptable to KRHA members. Such legislation would be acceptable generally if it is not detrimental to appropriate and lawful actions related to the sale of alcohol. KRHA staff and lobbyist should not directly seek introduction of such legislation but should seek such legislation on which the KRHA might be willing to remain neutral in lieu of more onerous legislation. The KRHA shall continue to educate the full membership about dram shop legislation and the actions of the KRHA related to this issue. Adopted 1/15/2003, Rev 12/2/2004

Recodification of Kansas Liquor Control Act Delineation of rights and authorities of the state government versus local government regarding control of liquor licensees.

KRHA Position: KRHA supports legislation in the regulation of alcohol laws such that there is uniformity regarding licensing, distribution of product, and general legal standards applicable to alcohol. KRHA supports limiting local government regulation and authority to hours of operations, zoning issues and other limited powers. Adopted 1/11/2001

Revocation of Alcohol License for Non-Payment of TaxesAuthorizing Department of Revenue to revoke liquor license for non-payment of taxes other than liquor taxes.

KRHA Position: KRHA opposes revocation of alcohol licenses for non-payment of taxes. If revocation of license is to be legislated for non-payment of taxes, the taxes should be limited to those which are imposed on the consumer or employee and the entity serves only as a collector/remitter of the tax, such as sales tax, bed tax, and withholding tax. KRHA opposes efforts to expand the revocation authority to non-payment of other taxes owed by the entity, or any taxes owed by partners of a partnership, shareholders of a corporation, or other members who were stockholders of any other legal entity. Adopted 1/11/2001

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Locations - 960,000 Employees - 12.8 Million 2011 Projected Industry Sales - 604 Billion

Server Age Should 16 and 17 year olds working in restaurants be permitted by law to take orders for and collect money or other payment for sales of cereal malt beverage or alcoholic beverages? KRHA Position: The KRHA supports the ability of 16 and 17 year olds to take orders and to collect payment, in cash or otherwise for sales of cereal malt beverage or alcoholic beverages. KRHA does not support 16 and 17 year olds serving cereal malt beverage or alcohol, or mixing or dispensing drinks containing alcohol. KRHA strongly supports the existing age restriction statutes regarding dispensing, serving, and consumption of cereal malt beverage and alcoholic beverages. Adopted 1/15/2003

Union Card Check Should KRHA oppose the proposed “Employee Free Choice Act”, also known as “Card Check”, bill currently before Congress?KRHA Position: KRHA opposes the proposed “Employee Free Choice Act”, also known as “Card Check”, bill currently before Congress. Pros: The measure would dramatically change U.S. labor law. Today, employees are entitled to a private-ballot election when deciding whether they want union representation in their workplace. If Congress passes the Employee Free Choice Act, employees effectively lose their right to private-ballot elections. The bill would establish a so-called “card-check” union organizing system, in which a majority of employees simply sign a card in favor of union representation. A card check process increases the risk of coercion. Private ballots are a basic American right and an employee’s decision to join a union should be made in private. Cons: Unions argue that employer abuse pursuant to current provisions of the Fair Labor Standards Act, and other federal laws warrants additional changes in the law to permit unions to encourage employee membership in unions. Adopted 1/14/09

KDA Lodging Inspections SuspensionShould the Kansas Department of Agriculture be permitted to suspend lodging facility inspections for budgetary/funding reasons or otherwise and if so, should the KDA continue a minimum of activities to insure compliance with KDA regulatory responsibilities and health and safety concerns?KRHA Position: Kansas Department of Agriculture (KDA) should, as a result of budget cutbacks caused by the economic recession or otherwise, have the authority to suspend lodging facility inspections. However, the KDA should also, at a very minimum, continue to provide a program and mechanism whereby complaints may be filed by the public and such complaints are investigated by inspectors, and should also maintain and continue new facility inspections so as to insure that new facilities opening during such suspension period meet safety and health standards. Pros: The KDA has proposed suspension of their responsibility for inspecting lodging facilities, due to budget cuts resulting from the economic recession. The KDA, as all other state agencies, should have the ability to administer their agency in the same way that private businesses administer their businesses, and included in such self administration is the ability to determine priorities of responsibilities for both activities and budgetary expenditures. Therefore, the KDA should have the ability to suspend normal lodging facility inspections due to

Legislative

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budget restraints, but a total suspension of the program of inspections should not occur in such a fashion as to deny the public a government agency with which they can file complaints, nor should the KDA suspend inspections of new facilities which open during such periods of partial suspension of the lodging inspection program. Lodging facility inspections are performed by the KDA in order to protect the public health and welfare. Suspension of such a program impacts adversely on the public, but continuation of a complaint process will put the KDA in the same position they were in prior to the development of periodic inspections, and would provide a minimum level of protection for the public in the event of a facility not meeting minimum health and safety requirements. In addition, new hotels and motels may be established during the period of time that KDA has suspended inspections. Cons: KDA or other governmental entity should be required to conduct inspections on lodging facilities regardless of budget constraints, and the obligation of government to protecting the public is so great that either the industry should pay fees to sustain the program, or taxes should be raised. Adopted 1/14/2010

Menu Nutrition Information LabelingShould government establish Menu-Labeling requirements? KRHA Position: KRHA opposes either state or local government imposing mandated menu-labeling requirements which establish caloric and other nutrition information to be made available to consumers either via menu information or overhead or other menuinformation, the purpose of which is to permit consumers to determine which food items to order. However, KRHA does not oppose providing such information to consumers through web sites, nutritional information sheets, or other media not otherwise disruptive to the written or displayed menu

process. Specifically, KRHA is willing to support legislation such as that introduced at the federal level by Sen. Tom Carper called the Labeling Education and Nutrition Act provided such requirements are established only for larger restaurants/chains which produce their food based upon consistent standards which allow for such nutrition information to be accurate. Small facilities whose food might vary in size portions or content should be exempted from any such legislation. Pros: The public has a right to be informed about the nutrition information of food they are eating which is prepared in restaurants. Armed with this nutrition information, the public can fight the increasing obesity facing the nation.

Cons: Menu labeling legislation is costly to restaurants unless the legislation recognizes other means of educating the public regarding nutrition information such as identified above in the KRHA position. Menu labeling is also onerous regulation for restaurants which are small and which prepare their food not following fomulaic methodologies. Restaurants should be entitled to utilize creativity of production of food items without having to document detailed caloric and nutritional information that would be inefficient, and extremely limiting on such businesses. Adopted 1/14/10

Immigration ReformShould Congress enact Immigration Reform legislation? KRHA Position: KRHA supports immigration reform legislation at the state or federal level which discourage illegal immigration into the United States, but which recognizes that many individuals who entered this country illegally, have now established themselves and tax-paying, law-abiding, hard-working citizens of this country, and therefore Congress needs to establish some mechanism to allow lawful repatriation of these citizens in a reasonable manner.

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Legislative Continued...

Pros: Immigration reform is critical for the nation’s security and economic health. If Congress doesn’t act, states will pass enforcement laws that conflict with or go far beyond federal requirements. Businesses trying to comply with the law will face a moving target of bewildering and punitive laws across the country – laws that fail to resolve fundamental problems with the U.S. immigration system. The only way to facilitate a sustainable workforce while ensuring national security and prosperity is through comprehensive reform. Employers are partners in economic growth and job creation, not adversaries in the immigration debate.Cons: Persons who have entered this country should not be able to remain here, when others have followed the law and are still waiting to come into this country. Those who came in illegally are criminals inherently, and should be removed to their country or origin, and then required to submit to the law for re-entering this country legally.

Smoking BansShould government impose smoking bans which supersede rights of the hotel, motel, restaurant, club, bar and/or tavern owner to manage their business as they desire with regards to smoking policies?KRHA Position: KRHA supports freedom of choice for business owners, employees and customers alike to choose the smoking environment in which they desire to operate, work and frequent. The KRHA, which has numerous members on both sides of the issue, also views its role in this controversial issue as one of providing notice and information about the issue to its entire membership so that individual members can express their own views. The KRHA will not oppose 1) a compromise smoking ban that is supported by business interests which recognizes the rights of hospitality and entertainment industries such as restaurants, bars, taverns, casinos, tobacco shops, and others to exercise their right to determine their own customers, and to allow or deny smoking as the business chooses, provided notice is given to customers and provided that such law is made uniformly applicable throughout the state, and specifically as it relates to businesses which compete with restaurant, lodging, or hospitality businesses: or 2) a smoking ban which is enacted at a state-wide level, which (a) preempts all local ordinances; (b) specifically allows smoking at outdoors facilities, including patios or other outdoor dining facilities, and (c) permits a phased-in/transition period of at least two years for facilities exempted from a local ban, in order to permit such an exempted facility to come into compliance with the state ban. In light of the State of Kansas enacting a smoking-ban which does not uniformly treat entertainment and hospitality businesses, the KRHA supports amendment to the smoking ban which either permit smoking at all restaurant, lodging, and hospitality/entertainment businesses, or which prohibits smoking uniformly. Thus, KRHA supports legislation amending the smoking ban law to remove the exemption for state owned and operated casinos.Pros: The government should be able to regulate private behavior if, in its opinion, it is a threat to the health and welfare of the public. Proponents still argue that environmental tobacco smoke (ETS) is carcinogenic based on an EPA finding which has since been overruled by a District Court.Cons: While the KRHA does not take a position either for or against smoking, the owner of private property should be able to determine his/her policies regarding smoking so as to appeal to the customers. Some businesses may choose to be smoking only, others no smoking, and others some combination of the two, but the business should have the

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Should KRHA Support or Oppose General Legislation not specifically directed at restaurants, lodging facilities, or the hospitality industry, but which legislation impacts the restaurant, lodging, or hospitality industries in a negative or positive manner, through impact on potential tax increases on our industries or otherwise?KRHA Position: KRHA will support or oppose general business legislation or other legislation which, while not specifically being directed at restaurants, lodging facilities, or the hospitality industry as opposed to other businesses, nevertheless has the potential to impact the restaurant,lodging, or hospitality industries and a negative or positive manner, through impact on potential tax increases on our industries or otherwise. While not enumerating the specific legislative issues with which KRHA might become engaged pursuant to this position paper, but for purposes of examples of legislation with which KRHA might take a position, the following are legislative subject with which KRHA might choose to become engaged: State General Fund (SGF) budget, as significant increases in state budget could mean additional tax burdens on businesses; School Finance, which, at 53% of the SGF budget, would be a major reason for additional taxes on businesses; State Employee Pension Reform, which, doe to the current unfunded pension shortfall, estimated to be between $8 billion and $14 billion, has the potential to require significant additional taxes on businesses; Health Reform, which is a direct cost-driver for all businesses; Labor Management issues (such as Project Labor Agreement legislation, mandatory paid leave requirement on businesses, Labor PAC payroll deductions), and other issues which have the potential to drive up employment costs for all businesses. Ado fled 11/1/42.Pro:The issues identifies above have the potential to impact all members of the KRHA, not exclusively, but to the extent that KRHA business owners would be impacted in the same manner as other businesses. Although broader business organizations such as Chambers of Commerce, national Federation of Independent Businesses, etc., obviously engage in general business issues such as those enumerated, it is also important for other specific business groups to ally with such broad business organizations with regards to legislation which can support KRHA businesses, or can negatively impact KRHA businesses. With multiple specific business associations aiding the lobbying efforts of general business organizations, the strength of the business interests can be significantly increased.Cons: KRHA and other specific business association devoted to particular businesses, should not engage in general business issues, which are more appropriately the responsibility of general business groups such as the chamber of commerce. The KRHA should only focus their time, energy, and resources on issue which exclusively impact the KRHA member businesses and industries.

right to establish the policy, and if customers do not want to be in the particular environment that the owner of the business chooses, then they can not utilize that business. Proponents argue that the EPA decision on ETS was based on flawed science, and that the decision of the District Court to overrule the finding by EPA based upon the evidence substantiates their position. Smoking bans or other smoking restrictions which are imposed on hotels, motels, restaurants, clubs, bars and taverns by federal, state, or local government which do not recognize private business owner rights and put businesses at an unfair advantage in comparison with businesses in neighboring cities, counties and/or states is detrimental to industry private business owners. City by city smoking bans/restrictions have the potential to drive business from restaurants in one city to restaurants in surrounding cities. If a local city is to impose a ban, such efforts should be consummated in conjunction with governing bodies of surrounding cities within the metropolitan area so that the smoking restrictions are uniformly applied to all indoor public places. Smoking bans or other smoking restrictions that restrict smoking in all indoor businesses and venues without any exceptions are less likely to give one business a competitive advantage over another business. Adopted 1/11/12

Association Group Health PlansAssociations such as the KRHA sometimes have difficulty establishing group health insurance policies because of limitations on provider jurisdiction and certain provisions of federal and state law. KRHA Position: KRHA supports development of a KRHA group health insurance policy, and legislative, regulatory, or other changes necessary to permit implementation of such a KRHA policy in the state of Kansas. Adopted: 1/16/2002

Healthcare Costs and Healthcare Insur-anceKRHA Position: KRHA opposes the implementation of a universal healthcare system and further opposes healthcare systems which are funded primarily by taxes on businesses or that are implemented by imposing mandates on businesses. Adopted 1/11/2001

HMO and Employer Liability to Consumers of Medical Healthcare KRHA Position: KRHA opposes legislation making businesses liable for healthcare decisions made by physicians or HMOs regarding the delivery of healthcare pursuant to programs under the auspices of the employer. Adopted: 1/11/2001

Utilization of Unemployment Insurance Fund For payment of family medical leave or other governmental programs. KRHA Position: The KRHA opposes the utilization of the Unemployment Insurance Fund monies for use by the Family Medical Leave Act or any other state or federal program. Adopted 1/11/2001

Utilization of Unemployment Insurance Fund For payment of family medical leave or other governmental programs. KRHA Position: The KRHA opposes the utilization of the Unemployment Insurance Fund monies for use by the Family Medical Leave Act or any other state or federal program. Adopted 1/11/2001

Insurance

Workers Compensation Miscellaneous issues related to group-funded pools. KRHA Position: KRHA supports legislation that permits self-insurance funds greater autonomy in order to attain more financial strength and growth. Adopted: 1/11/2001

Workers Compensation-Pre-Existing Conditions Credit given to employers for pre-existing conditions on work related injuries. KRHA Position: KRHA supports legislation that recognizes pre-existing health conditions when determining benefits as it relates to a work injury. Adopted: 1/11/2001

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Your voice in the hopsitality industry!

Other

Workers Compensation-Exclusive RemedyPermitting employees to sue employers outside of Workers Compensation for work-related injuries. KRHA Position: KRHA opposes the elimination of “exclusive remedy” provisions of the Workers Compensation Act, and opposes employees being able to file separate civil suits against the employer outside of the Workers Compensation Act. Adopted 1/11/2001

Buy Kansas First Should the KRHA encourage “buy Kansas first” programs or support legislation regarding such programs? KRHA Position: KRHA supports the concept of “buy Kansas first,” including programs or legislation to encourage or promote such efforts, but recognizes that such programs should not unduly interfere with national or international trade or free market concepts. Adopted 12/4/03

Government Sponsored Lodging Facilities Should state or local governments develop lodging facilities, contract for development of lodging facilities, or permit development of lodging facilities on government owned property? KRHA Position: KRHA recognizes the need for government to facilitate development of lodging facilities to promote tourism and economic development in certain instances, but development of such facilities should be accomplished by the private sector lodging industry. Adopted 1/15/2003

Government Sponsored Restaurant Facilities Should state or local governments develop or operate restaurant facilities, contract for development of restaurant facilities, or permit development of restaurant facilities on government owned property? KRHA Position: KRHA recognizes the need for government to facilitate development of restaurant facilities 1) as part of promotion of tourism and economic development in certain instances and 2) to provide food service in certain governmental settings, but development of such facilities should be accomplished, if at all possible, by the private sector restaurant industry. Adopted 12/4/03

Mandatory Wage Laws Should the statutory rate for minimum wage to be paid to employees be increased, or a living or starting wage law be enacted? KRHA Position: KRHA opposes enactment of starting wage or living wage statutes and supports repeal of Kansas minimum wage. Adopted 1/11/2001

Obesity Frivolous Lawsuits Should the KRHA support legislation to prohibit or restrict lawsuits against the food industry alleging that food or the service of food is responsible for the obesity of the person filing the claim? KRHA Position: KRHA supports legislation which would ban or restrict lawsuits brought against the food industry, including restaurants, alleging that the long-term consumption of food has caused the obesity of the claimant. KRHA strongly supports programs which promote the three steps to a healthy lifestyle-well balanced diet, moderation, and physical activity. KRHA opposes any legislation which attempts to impose liability upon the food industry for such causes of action. Adopted 12/4/03, Rev 12/2/2004

Passage of Legislation Relating to Franchiser and Franchise Relationship KRHA Position: KRHA does not take a position on the passage or defeat of franchiser/franchisee legislation. Adopted 1/11/2001

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Server TrainingMandatory or permissive server training programs and possible certificates for persons authorized to work in the alcoholic liquor or food service industries. KRHA Position: KRHA opposes mandatory server training programs, but would support permissive training programs and incentives to conduct server training. Adopted 1/11/2001, Rev. 1/15/2003

State Administered OSHA Should KRHA support legislation replacing the federal Occupational Safety and Health Administration oversight with a state administered OSHA funded by a fee on the state workers compensation fund? KRHA Position: Workplace safety is a high priority for the KRHA. KRHA supports retention of the current federal OSHA program and would oppose a state OSHA plan which would be funded through a fee on workers compensation fund. This fee would result in higher workers compensation rates for KRHA members. KRHA feels that a state implemented OSHA is unnecessary and would be costly to business. The benefits of local access to a state-operated OSHA program would not outweigh the costs and detriments of such a program. Adopted 12/4/03

State Funding of Tourism ProgramsShould the state play a role in funding and promoting tourism and how should it be financed? KRHA Position: KRHA supports state funding for tourism promotion, including mechanisms designed to maintain minimum levels of tourism funding and to increase tourism promotion as an economic development tool for the state. KRHA opposes any direct, targeted tax on the restaurant or lodging industries to fund such a program. Adopted 12/4/03

The State LotteryShould the State Lottery be expanded to include casino-type gaming? KRHA Position: The KRHA supports the State Lottery; but remains neutral on the expansion of casino-type gaming. Adopted 1/11/2001, Rev. 1/15/2003

Taxes and FeesDestination Sales Tax KRHA Position: KRHA supports a destination sales tax between states, but only for state sales taxes. KRHA supports destination sales tax for local sales taxes only if appropriate exemptions are made for de minimus sales where the cost, time and effort to calculate, collect, and remit the tax exceeds the value of the tax collected. Adopted: 3/25/2004

Equal Lodging Taxes Should the KRHA support equal taxation of lodging facilities regardless of whether or not such facility is owner occupied? KRHA Position: KRHA supports equal taxation for all lodging facilities regardless of owner occupancy status. Adopted 12/4/2003

Sales Tax on Food Should sales of food be exempt from state/local sales tax? KRHA Position: KRHA believes sales tax should be the same for all forms of retail sale of food. Therefore, the KRHA supports elimination of the sales tax on food if the tax is eliminated for food sold in restaurants as well as food sold in grocery stores or other retail food sales facilities. Adopted: 1/11/2001, Rev. 1/15/2003

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Your voice in the hopsitality industry!

License Fees Numerous members of the KRHA are required to pay license fees to the state in order to be licensed as a restaurant or lodging facility to sell alcohol, and for other purposes. KRHA Position: KRHA recognizes the need for state licensing bodies to have sufficient fees to perform regulatory functions, but fees should be set at a level that are reasonable and do not result in the licensing agency being inefficient or having excess revenues. Adopted: 1/16/2002, Rev. 1/15/2003

Sales Tax on Utilities in Lodging Facilities Current Kansas law exempts from sales tax utilities used in providing taxable services. Provision of lodging services is within that general exemption. Current regulations of the Kansas Department of Revenue provide that a lodging facility is deemed to be providing services only for the provision of the room rental itself, and that the consumer is not purchasing services for other amenities provided by the lodging facility, such as swimming pools, hallways, and other portions of the hotel. The Department has also interpreted the statute in such a way that even though ice and linens are “consumed” in the room itself, that utilities used for ice machines and washing and drying of linens for the room are not exempt. KRHA Position: The KRHA supports legislation and regulations that provide that utilities used by lodging facilities should be exempt from sales taxation to the extent that such utilities in the provision of services to the customer/guest, not just the utilities consumed within the confines of the sleeping room itself. Adopted: 1/16/2002

Targeted TaxesShould the KRHA oppose targeted taxes such as excise taxes which are imposed on specific products, services, or behavior, separate and apart from general taxes such as income taxes, sales taxes, and property taxes? KRHA Position: KRHA generally encourages governments to fund their programs utilizing broad based taxes such as income, sales, and property taxes. While not totally opposing targeted taxes, such as excise taxes, KRHA generally discourages use of such taxes and generally opposes increases in existing taxes or creation of new targeted taxes. Adopted 12/4/03

Taxes-Increase Purchase Threshold for Personal Property Taxes Current law permits property which costs less than a statutorily set monetary threshold (currently $1,000) when originally purchased to be excluded from personal property tax for property purchased prior to January 1, 2007, and exempts all personal property purchased by businesses or industry purchased after January 1, 2007 from personal property tax. Should the exemption for business and industrial machinery andequipment continue to be exempt from personal property tax? KRHA Position: KRHA supports continuing the exemption from personal property tax for business and industrial machinery and equipment. Adopted 1-11-2001, Rev. 1/15/2003

KRHA Legislative SuccessesDespite the continuous budget debate, the Legislature did pass a number of “big ticket” items this year, including:

Workers Compensation Reform Bill (Sub.HB 2134) - this Bill provided a compromise between business and labor with much needed reform to the state’s Workers Compensation Act.

Unemployment Insurance Reform 9SB 77) - this bill was a follow-up to last year’s HB 2676 and provided the state with a plan to start rebuilding the state’s unemployment insurance fund and repay borrowed federal monies.

KPERS Reform (S Sub. HB 2149) - Senate Sub. HB 2194 would modify the Kansas Retirement System (KPERS) retirement plan for public employees who are current Kpers members and for future public employees of the state, schools, and local groups. The hope that this is the first step in a necessary shoring up of a

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SERVSAFE TRAININGThe ServSafe program provides an overview of basic sanitation procedures, from receiving food at the loading dock to serving it to customers. As stated in the Kansas Food Code, one way the person in charge can demonstrate

knowledge is by being a certified food protection manager. The ServSafe Manager class provides this certification. The person in charge is also responsible for explaining the responsibilities, rights, and authorities assigned by the Kansas Food Code to the Food Employee. One of the best ways to ensure your employees have the information to safely and properly do their jobs is by having them attend a ServSafe employee level training class. The ServSafe program is recognized by more federal, state and local jurisdictions than any other food safety training program, and it is the only program where proceeds go back to support industry education.

The ServSafe Alcohol program outlines effective responsible alcohol service practices for all front-of-the-house staff, including bartenders, waiters, hosts, bus persons, security, and valets. ServSafe Alcohol is today’s real life training solution, which provides the best resources to help protect your business every day.

retirement system that has a massive liablity for the state in the future. Alcohol, Special Events, Microdistilleries.

Public Venues, Happy Hour, Farm Wineries (CCR HB 2689) - (PASSED) - The Conference Committee Report includes: Alcoholic Liquor Sampling (SB 269), Temporary Permits (SB 274), Salesperson Permits (SB 275), Licensing of Microdistilleries (SB 277), Happy Hour (SB 288), Public Venue License (SB 299), Allow Alcohol on Wildlife and Parks properties (SB 313), Manufacturer Sampling (SB 358), Farm Winery License Special Events (SB 390) and Farm Wineries; Domestic Wine Label (SB 379). The House agreed to these Senate amendments and further added the following provisions: Strike the sampling size limitations for tasting by liquor retailers, define designated areas in public venues and set the local fee from the public venue licensee of not more than $1,000; Reduce the percentage requirement for wine to be made from Kansas products from 60 to 30 percent; the CCR Does NOT adopt the repeal of the current prohibition of hiring certain employees with a criminal record; and does not adopt the provision requiring only one officer and one director to meet citizenship and residence requirements for a distributor’s license. The CCR was adopted 40-0 in the Senate and 97-24 in the House. The Governor has signed the bill. The provision on temporary permits will go into effect upon publication in the Kansas Register but all other provisions will go into effect July 1, 2012.

2011 was an extremely busy year. KRHA and Hein Law Firm lobbied 18 Priority bills and monitored an additional 112 bills. The Legislative Session was dominated again by the budget. However KRHA was successful in passing a couple of “big ticket” items this year, including: Workers Compensation Reform Bill, Unemployment Insurance Reform and KPERS Reform. Prioritty bills passed were: Lodging Fees, Sales Tax Provisions and Income Tax Credits.

Many challenges were faced in 2010 as KRHA successfully defeated the enactment of the sugar beverage tax and the increase of the alcohol tax, successfully lobbied for the reinstatement of the lodging inspection program without the increase in lodging fees and positively influenced legislation regarding unemployment insurance tax increases.

Education

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Your voice in the hopsitality industry!

PROSTARTProstart is a program backed by the National Restaurant Association Educational Foundation (NRAEF) and is aimed at high school junior and seniors who are interested in a career within the hospitality industries. The two-year ProStart program introduces students to concepts not found in traditional family and consumer science courses, such as culinary essentials and basic food service management skills. Members can be a part of this exciting program by seeking out ProStart students for internships, which allows students to gain real-world experience and practical skills that will help to shape their futures in the hospitality industry. By mentoring a ProStart student, you can help make a connection between their present performance and their future, as well as gain the opportunity to recruit a possible long-term employee who is already committed to a rewarding career in the industry.

The Kansas Restaurant & Hospitality Association Education Foundation (KRHAEF) supports students who are committed to furthering their education and enhancing their careers in the restaurant and food service industry by awarding scholarships. The KRHAEF awards scholarships to individuals that are pursuing an education/degree in food service, lodging, and/or hospitality management at any Kansas 2 or 4 year college, university, or vocational school. The foundation also offers scholarships to students that are employed by a KRHA member in good standing and attending any Kansas 2 or 4 year college, university, or vocational school.

For more information on these programs log on to www.krha.org or contact Neely Carlson, VP Education and Train-ing, at ncarlson@krha.org or 316-267-8383.

SCHOLARSHIPS

If you are not checking your utility bills monthly to insure your restaurant, hotel, or motel is getting the sales tax exemption you have applied for or if you are not aware K.S.A. 79-3606 provides your business the right to apply for sales tax exemption on “all sales of tangible personal property which is consumed in the production, manufacture, processing, mining, drilling, refining or compounding of tangible personal property for consumption in such production, manufacture, processing, mining, drilling, refining, compounding, irrigation and in providing such services,” please keep reading!

A survey was sent out to board members by the KRHA office and two board members responded their utility sales tax exemption had been dropped from their utility bills.

As a result of this information, we have been mentioning these findings in meetings and conversations with members to create awareness. In a recent meeting with restaurateurs in Salina several business owners present were not aware of the sales tax exemption on electricity, gas, and water purchases used in food preparation for resale.

The purpose of this article is to create awareness only! If you need the KRHA office will be glad to assist you in obtaining forms or information you need for your utility sales tax exemption. In addition there are other items that are sales tax exempt you may want to research. For complete and detailed information on this topic you may want to contact the Department of Revenue, Division of Tax Operations directly and ask for Ron Grant. Ron has written an ‘Information Guide’ for the hotel and restaurant industries that explains sales tax, transient guest tax and sales tax exemptions in away we can all understand. Ron’s address information is 915 SW Harrison Topeka, KS 66612; telephone number is 785-296-2481; e-mail Ronald_grant@kdor.state.ks.us. Forms, publications, and a library of policy information are also available at www.ink.org/public/kdor.

Sales Tax Exemption on UtilitiesAre you getting yours? Do you know about the exemption?

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To print a copy of STATEMENT FOR SALES TAX EXEMPTION ON ELECTRICITY, GAS, OR WATER FURNISHED THROUGH ONE METER, type the following link into your internet browser: http://www.certcapture.com/downloads/certificates/KS/Utility%20ST-28B.pdf

COPYRIGHT LAWMost restaurant operators play music in their establishments for the enjoyment of their customers. In the case of recorded music, the performance rights are generally owned by one of the performance-rights societies, such as the American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and SESAC, Inc. These societies offer license agreements to commercial establishments for the privilege of playing music composed or performed by those copyright owners whose performing rights these societies hold. The fees charged generally depend upon such factors as whether the music is recorded or live, room occupancy, and whether dancing is permitted.

Restaurateurs can avoid entering into license agreements with the performing rights societies by instead entering into an agreement with a background music provider, such as MUZAK. Such providers enter into agreements with the performing rights societies so that the restaurant operator does not have to pay a fee to the societies. However, the operator can expect, to pay substantial fees to the background music provider. Another way to avoid entering into license agreements with the music licensing societies is by installing a coin-operated jukebox. The restaurant operator, however, cannot charge an admission fee to his or her establishment and the jukebox must be licensed by a licensed operator, such as the Jukebox License Office in New York City (800-955-JUKE or 212-581-0190), which involves a fee.

Restaurant operators have often asked if it is possible to be licensed by only one of the societies. The answer is theoretically “yes,” but this may be difficult in practice since it would require that the operator play only the music of one of the societies. Since ASCAP and BMI each have a repertoire of over a million songs, it would be very difficult to play the music of only one society, whether the music played is live or recorded.

If you are playing copyrighted music in your restaurant, you need to pay up—The penalties for not doing so are severe. Under new copyright law (effective Jan 25, 1999), however, some restaurants are exempt from paying royalties on radio and television music only.

If you would like to seek assistance in researching and applying for prior year sales tax exemptions you may be eligible for, I would like to encourage you to call one of KRHA’s two allied members who specialize in this service. Their contact information is David McBride with International Utility Specialists, Inc. at 800-397-7283 or Jerry Capps with Allen, Gibbs & Houlik in Wichita at 316-291-4130. Again, if we can be of assistance, please call the KRHA office at 800-279-5742.

Sales Tax Exemption on Utilities Continued...

Music Licensing

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Your voice in the hopsitality industry!

EXEMPTIONRestaurants under 3,750 gross square feet (not counting the parking lot) will be exempt from paying royalties on radio and television music only.

Restaurants over 3,750 gross square feet (not counting the parking lot) may also be exempt if they play no more than four televisions, each measuring up to 55” diagonally (no more than one per room), with no more than six speakers total, and with no more than four speakers per room. Another way they may be exempt is if they play radios that have no more than six speakers total, with no more than four speakers per room. For restaurants to be eligible for the exemption, they must not charge a cover fee to see the television or listen to the radio. Retailers also receive an exemption under the new law. Retailers under 2,000 gross square feet (not counting the parking lot) are exempt; retailers over 2,000 gross square feet (not counting the parking lot) will receive the same equipment exemption as restaurant owners.

You Play Music in Your Restaurant. Now What?

Determine what kind(s) of music you playCompact DiscsDJs/DancingDVDsJuke BoxesKaraoke

Determine how often you play music. Do you have a singer perform at your establishment once a week? Do you allow dancing on holidays, such as St. Patrick’s Day? Do you set up for Karaoke on Sundays or any other day? These are just a few examples of questions you must consider when determining the frequency you play music.

Contact ASCAP, BMI and SESAC to determine if you need to sign a music licensing agreement. Make sure you cover your bases by calling all three music licensing societies:

ASCAP - 800-505-4052BMI - 800-925-8451SESAC - 800-826-9996

Copyright law says that an infringer of a copyright may be liable for: the copyright owner’s actual damages because of the violation and any profits of the infringer attributable to the infringement; statutory damages of $500 to $20,000 per copyrighted work (if the infringement was willful, the court may increase the damages to $100,000). The new law adds a possible new penalty: two times the amount of the license fee if the proprietor did not have reasonable grounds to believe that he/she was exempt.

In addition to these damages, the court may award reasonable attorneys’ fees to the prevailing party.

Live PerformanceMusic on HoldRadioTapesTelevision

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RATE DISPUTE MECHANISMEffective January 25, 1999 the law provides for rate disputes with ASCAP and BMI to be heard in 12 circuits throughout the United States. However, the law does not affect disputes with SESAC.

WHY DO I HAVE TO PAY ROYALTIES?The short answer to the question above is: Because the law says you do. But, clearly, some further explanation is needed, as to why. For example, a merchant has to pay to play radio music in his or her store, when playing the radio or listening to tapes at home or in one’s car is “free.”

The long answer starts with the United States Constitution, which gives Congress the power to grant patents and copyrights. The Copyright Law of the U.S. today gives copyright owners the exclusive right to publicly perform or authorize performance of their works. Generally speaking, public performances are very broadly construed under the law and are defined as performing “at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” Performances at charitable functions are exempt from license or royalty requirements only if the performances have no direct or indirect commercial advantage and if no one involved with the performance, including any of the events’ performers, organizers, or promoters, is paid, and there is no direct or indirect admission charge. Given the broad scope of the protection given copyright holders and those assigned their rights, anyone whose business in one way or another performs music for its customers or members should be aware that they may be called upon by one or more of the major performing rights organizations to license the performance of copyrighted works in their respective repertories. Buying a license from one performing rights organization, say BMI, does not protect a business from liability from unauthorized performance of songs in ASCAP’s or SESAC’s repertories. A list of places and events at which licensing could be required includes, but is not necessarily limited to: restaurants, bars, clubs and hotels where live or recorded music is played; shopping malls; stores that play broadcast or recorded music; trade shows; conventions; dance studios; skating rinks; private clubs or fraternal organizations; offices and stores that use “music on hold” for telephone customers; sports teams; colleges and universities; amusement parks; bowling centers; and the Internet. The proprietor of the business in which the copyrighted music is performed is liable for any infringement of copyrighted music in his or her place of business. A business person should consult his or her attorney with any questions as to whether the music he or she plans to play publicly is exempt from liability for royalty payments.

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Your voice in the hopsitality industry!

I play live music just one night a year, but I am under 3,500 gross square feet and play only televisions and radios the rest of the year. Am I exempt from music licensing fees?

No. The exemption covers restaurants that play radio and television music only. I have a current signed contract with ASCAP to play my televisions and radios, but I meet the square footage exemption under the new law. Can I just stop paying my fees?

Most likely not. If you have signed a contract, you must wait until the contract has expired. Once the con-tract has expired, contact the music licensing societies and let them know that your circumstances have changed.

Is there anything I can do if I do not like the licensing fee amounts that ASCAP BMI or SESAC demand?

Yes. You can challenge the fee in the federal district court in the circuit where you are located. For example, if you live in North Carolina, the circuit court is located in Richmond, VA. That way, you don’t have to travel to New York City to dispute the rate, which was the only available option under the previous law. I use the patio of my restaurant, but only in the summer. Does this count toward my gross square footage?

Yes. If you use the patio area of your restaurant to serve customers even once a year it likely will be counted toward your total gross square footage. My restaurant is under 3,750 gross square feet. I cur-rently play compact discs in my establishment. Can I continue to play the compact discs and still claim the exemption? No. Just because you paid for the discs does not entitle you to play them publicly. The new exemption just covers restaurants that play radio or television music only. You must stop playing the compact discs to meet the exemption requirements. Or, if you wish to continue to play the discs, you must contact the music licensing societies to determine your licensing requirements.

Do I have to include all of my restaurant space (storage, etc.) when determining if I quality for the exemp-tion?

Yes. All space must be included, with one exception: parking space (as long as that space is not used for playing music).

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Frequently Asked Questions

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100% IS THE MAGIC NUMBER: ALL TIPS ARE TAXABLEIf you earn tips, be aware that if you receive more than $20 in a month, all these tips count as income that you must report and pay taxes on. This includes cash tips, tips you receive from others and credit card tips, minus what you tip out to others.The law requires you to report and pay taxes on 100% of the tips you keep after tip-outs. You may have heard the misconception that you only need to report 8% of sales. You can get into trouble if you earn more and do not report.

KEEP GOOD RECORDSGood daily records are the only things that will save you if the IRS audits you. Your daily records must show how much you made in cash and credit card tips, the amount you receive from other employees and the amount you tipped-out to other employees.

YOU MUST REPORT YOUR TIPS TO YOUR EMPLOYERYou should visit with your employer for the preferred form, contents and frequency for reporting tips. This needs to be to your employer no later than the 10th day of the following month. Your employer may require weekly or daily reporting of your tip income.

NOT REPORTING YOUR TIPS IS A BIG DEALIf the IRS audits your tax return and finds out you underreported your tips, you could be facing penalties and interest as well as the underpaid taxes. Falsifying tip income is illegal. You will owe FICA taxes on the unreported tips. Additionally, the IRS has the right to exam up to three years of back returns. If the IRS suspects fraud, they can go even further back. You could be even facing jail if tax evasion is proven.

THE 8% MYTHMany restaurant employers and employees may have heard the false rumor that tip-earners only need to report tips equal to 8% (or some other such number, such as 10%) of their sales. That is a widespread misconception. The law requires employees to report and pay taxes on 100% of the tips they keep after tip-outs. It is that simple.

Employee Tip-Reporting BasicsWhat you need to know if you earn tips

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Your voice in the hopsitality industry!

In light of the June 17, 2002 US Supreme Court ruling, we thought it would be beneficial to our members to review the basics of “tip reporting”. In effect, the US Supreme Court gave the IRS more latitude in assessing payroll taxes for underreported tip income, especially cash tips. Although tips are paid to your employees, you as the employer have certain obligations to ensure that the related payroll taxes are paid.

If you have employees that are expected to receive more than $20 per month in tip income, your employees are required to report the tip income to you no less than monthly. Employers can however, require more frequent reporting. IRS form 4070 and 4070A can be used.

As an employer, you may also be required to file the IRS Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. The three criteria for determining filing are:

1. You employ more that ten employees on a typical day2. You serve food and drink for on premises consumption, and3. Tipping is customary in your establishmentIf you are a Form 8027 filer and the total tips do not equal at least 8% of sales, you need to be familiar with “tip allocation”. This simply requires you to allocate tip income to each employee so that their tip income is at least 8% of his or her sales. Although you are required to withhold all applicable taxes and match FICA tax on reported tips, as the employer, you are not required to withhold taxes on the allocated tips.

The current IRS position seems to be to go after the employers only. They are not assessing the employees. In light of the current US Supreme Court ruling, the IRS can make employer assessments as far back as 1988. The one way to help safeguard your business in the future is to sign a TRAC agreement with the IRS.

EducationEducating your employees seems to be the most important thing to do. Employees need to understand that 100% of their tips are taxable and must be reported. Employees that underreport tips are subject to IRS examination, which in turn makes you and your business vulnerable to the IRS. Employee’s failure to properly report tip income to their employer can make them subject to employer disciplinary action, including termination. An employer should establish adequate tip-reporting procedures for your business. These should include procedures for direct and indirect tipped employees. You should include frequency of reporting, format for reporting, cash tips and credit card tips, tip-outs, etc. The employee should sign the report before submission.

Employer Tip-Reporting BasicsWhat you need to know if you employ tipped workers

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REFERENCE THESE SOURCES FOR MORE INFORMATION

» National Restaurant Association web site, www.restaurant.org.» IRS web site www.irs.gov» IRS Circular E» IRS Publication 1244» Form 8027 and instructions» National Restaurant Association’s Tip Reporting Education Kit

Below is a sample of Form 4070A taken from Publication 1244 from the Internal Revenue Service. This is an example of what your employees should use to report their tips.

This information is provided by the Kansas Restaurant & Hospitality Association as a member service and is not intended as legal, tax or other professional advice. The Kansas Restaurant & Hospitality Association strongly encourages readers to consult with their attorneys or accountants prior to taking any action based on the information contained here.

SAMPLE

Tip Reporting Basics

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Your voice in the hopsitality industry!

The IRS has begun a new compliance effort to encourage employers to file Form 8027, or Employer’s Annual Information Return of Tip Income and Allocated Tips. This form has been ignored by most restaurant owners in the past, but now is going to be required by all food and beverage establishments with 10 or more employees or their equivalent (more than 80 employee hours) on a typical day. The IRS will send out notices to those establishments that are believed to have failed to file Form 8027. They business owner will have the option to file the form without penalties, or explain why they believe they should not be required to file it. The IRS will investigate and follow up with those who opt out, to decide if they should be required to file this form. Always make sure that you are filing all the necessary forms with the IRS to avoid having to pay any penalties. Below is an example of Form 8027, and you can download a copy at http://www.irs.gov/pub/irs-pdf/f8027.pdf.

OMB No. 1545-0714 Employer’s Annual Information Return ofTip Income and Allocated Tips

8027 Form

Department of the TreasuryInternal Revenue Service

For Privacy Act and Paperwork Reduction Act Notice, see page 6 of the separate instructions.

Type of establishment (checkonly one box)

Name of establishment

Evening meals only 1

Evening and othermeals

2

Number and street (see instructions)

Meals other thanevening meals

3

City or town, state, and ZIP code

Alcoholic beverages 4

Establishment number(see instructions)

Employer’s name (same name as on Form 941)

Number and street (P.O. box, if applicable)

City, state, and ZIP code (if a foreign address, see instructions)

Check if: Amended Return

Does this establishment accept creditcards, debit cards, or other charges?

1 Total charged tips for calendar year 2009

1

2 Total charge receipts showing charged tips (see instructions)

2

3 Total amount of service charges of less than 10% paid as wages to employees

3

4a 4a Total tips reported by indirectly tipped employees

4b b Total tips reported by directly tipped employees

4c c Total tips reported (add lines 4a and 4b)

5 Gross receipts from food or beverage operations (not less than line 2—see instructions)

5

6 6 Multiply line 5 by 8% (.08) or the lower rate shown here � granted by the IRS.

(Attach a copy of the IRS determination letter to this return.)

7 7 Allocation of tips. If line 6 is more than line 4c, enter the excess here � This amount must be allocated as tips to tipped employees working in this establishment.

Check the box below that shows the method used for the allocation. (Show the portion, ifany, attributable to each employee in box 8 of the employee’s Form W-2.) a Allocation based on hours-worked method (see instructions for restriction)

b Allocation based on gross receipts method

c Allocation based on good-faith agreement (Attach a copy of the agreement.)

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief,it is true, correct, and complete.

Date � Title � Signature �

Form 8027 (2009) Cat. No. 49989U

Note. If you marked the checkbox in line 7a, enter the average number of employee hoursworked per business day during the payroll period. (see instructions)

Apt. or suite no.

Note. If you have allocated tips using other than the calendar year (semimonthly, biweekly, quarterly, etc.), mark an “X” on line 6 and enter the amount of allocated tips from yourrecords on line 7.

Enter the total number of directly tipped employees at this establishment during 2009 �

8

Note. Complete the Employer’s Optional Worksheet for Tipped Employees on page 6of the instructions to determine potential unreported tips of your employees.

� See separate instructions.

Yes (lines 1 and 2 must be completed) No

Final Return

09 Employer identification number

Attributed Tip Income Program (ATIP). See Revenue Procedure 2006-30 SAMPLE

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KRHA LEGILSATIVE AFFAIRS CONFERENCE Topeka, KS - Ramada Convention Center January 11, 11:30AM - 1:30PM, KRHA Taste of Kansas Legislative Luncheon 1:45PM - 4:00PM, Annual Member Meetings 4:00PM - 5:30PM, Social January 12, 8:00 AM -12:00PM, Breakfast & Legislator visits KANSAS PROSTART STUDENT INVITATIONAL Wichita, KS - DoubleTree by Hilton Airport Hilton March 6 - Student Competition Check - In and Job Fair March 7 - Kansas ProStart Student Invitational (Student Competition)

BOARD MEETINGS Wichita, KS - Marriott Wichita March 29, 9:00AM - 12:00PM, KRHA Insurance Board of Directors Meeting 12:00PM - 1:00PM, Joint Lunch 1:00PM - 3:00PM, KRHA Association Board of Directors Meeting NATIONAL RESTAURANT ASSOCIATION PUBLIC AFFAIRS CONFERENCE Washington D.C. April 17-18

NATIONAL PROSTART STUDENT INVITATIONAL Baltimore, MD - Baltimore Marriott Waterfront Hotel April 27 - April 29, visit www.restaurant.prostart.org for more information

National Restaurant Association Trade Show (NRA Show) Chicago, IL - McCormick Place May 5-8

PAC WHACK OPEN GOLF TOURNAMENT Mayetta, KS - FireKeeper Golf Course May 14

2012 Calendar of Events

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Your voice in the hopsitality industry!

BOARD MEETINGS Location TBD June 21, 9:00AM - 12:00PM, KRHA Insurance Board of Directors Meeting 12:00PM - 1:00PM, Joint Lunch 1:00PM - 3:00PM, KRHA Association Board of Directors Meeting HOLD EM’

CHAMPIONSHIP AT THE PAC WHACK CLASSIC Wichita, KS- Best Western Airport Inn August 19

PAC WHACK CLASSIC GOLF TOURNAMENT Newton, KS - Sand Creek Station August 20

BOARD MEETINGS Wichita, KS - Best Western Airport Inn & Conference Center September 20, 9:00AM - 12:00PM, KRHA Insurance Board of Directors Meeting 12:00PM - 1:00PM, Joint Lunch 1:00PM - 3:00PM, KRHA Association Board of Directors Meeting

EVENING OF HOSPITALITY Wichita, KS - Hyatt Regency October 15, 6:00PM - 9:00PM

BOARD MEETINGS Wichita, KS - KRHA Office December 6, 9:00AM - 2:00PM, KRHA Insurance Board of Directors Meeting 12:00PM - 1:00PM, Lunch BOARD MEETINGS Wichita, KS - DoubleTree by Hilton Wichita Airport December 6, 1:00PM - 3:00PM, KRHA Association Board of Directors Meeting 12:00PM - 1:00PM, Lunch

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HOSPITALITYI n s u r a n c e S e r v i c e s

Platinum

2012 Annual Sponsors

ContributingCargillDr. Pepper Snapple GroupHospitality Management Systems / MICROSRemote Video of Kansas City

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Silver

Your voice in the hopsitality industry!

Our members only section is now available at www.krha.org! This section provides you with KRHA access to quality information, money-saving programs and the ability to purchase training and educational materials at a discount. For help logging-in, contact Lisa Graham at 316-267-8383 or lgraham@krha.org.

Members Only

Tina CoxVice President Risk Managementtcox@krha.org

Neeley CarlsonVice President Education & Trainingncarlson@krha.org

Support Staff

Executive Team

Staff Directory

Karie BellAccount Managerkbell@krha.org

Dave BelvinLoss Control Managerdblevin@krha.org

Bob ChambersMember Services Representativebchambers@krha.org

Rich EwenMember Services Representativerewen@krha.org

Lisa GrahamMarketing & Communications Managerlgraham@krha.org

Christine HanakaAccount Managerchanaka@krha.org

Karen HrdlickaClaims Specialistkhrdlicka@krha.org

Hannah NighswongerMarketing Representativehnighswonger@krha.org

Jeff RichardsMember Services Representativejrichards@krha.org

Anna SadlerAccounting Assistantasadler@krha.org

Shannon WilkinsonAccounting Assistantswilkinson@krha.org

Ron & Julie HeinLegislative Counselrhein@heinlaw.com

Adam MillsPresident & CEOamills@krha.org

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Sheila ThomasVice President Financesthomas@krha.org

3500 N. Rock Rd. Bldg. 1300Wichita, KS 67226

Phone: 316.267.8383Toll Free: 800.369.6787

Fax: 316-267-8400ksrest@krha.orgwww.krha.org

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