2024 overview of sales tax in Kansas

Welcome to Kintsugi's rundown on tax rates in the state of Louisiana. Louisiana's sales tax rates can vary depending on state, county/city, and local tax rates. Using a Louisiana sales tax calculator can help in determining the exact amounts, especially when calculating the sales tax Louisiana imposes.

The base state sales tax rate in Louisiana is 4.45%. Different parishes may add their own additional rates, resulting in variations. The highest combined sales tax rate is found in Ouachita Parish, at 12.95%, while the lowest is in Vernon Parish at 8.45%.

Among the districts, the highest is in the Monroe City District with a rate of 12.95%, while the lowest is found in many rural districts at the base state rate plus minimal or no additional local tax.

Sales tax range in Kansas

In 2024, the state of Kansas has witnessed a slight adjustment in its sales tax rates compared to 2023. Here's a detailed brief:

In 2023, Kansas had the following sales tax rates

• Kansas state-level sales tax: 6.5%
• Local municipalities added their own taxes, ranging from an additional 1.0% to 4.0%
• The combined state and local sales tax rate ranged between 7.5% and 10.5%

In 2024, the revised sales tax rates in Kansas are

• Kansas state-level sales tax: 6.35% (a decrease from 6.5%)
• Local municipalities continue to add their own taxes, still ranging from 1.0% to 4.0%
• The combined state and local sales tax rate now ranges between 7.35% and 10.35%

In summary

• The state-level sales tax was reduced from 6.5% in 2023 to 6.35% in 2024
• The local tax rate range remained the same (1.0% to 4.0%)
• The total combined sales tax rate decreased from a range of 7.5%-10.5% in 2023 to 7.35%-10.35% in 2024

Calculating Kansas sales tax

Determine the Taxable Amount

• Calculate the total sale amount.
• Include any applicable shipping charges.

Identify the State Sales Tax Rate

• Kansas state sales tax rate is 6.5%.

Determine the Local Sales Tax Rate

• Local tax rates, such as the sales tax overland park ks, can vary by county and city.
• Use the Kansas Department of Revenue's website or tools to find specific local rates, including the sales tax in Wichita KS.

Calculate State Sales Tax

• Multiply the taxable amount by the state sales tax rate (6.5%).

Calculate Local Sales Tax

• Multiply the taxable amount by the specific local sales tax rate.
• Sum State and Local Sales Taxes:
• Add the results from the state sales tax and local sales tax calculations.

Apply to Different Categories

• E-commerce
• Kansas requires sales tax collection for remote sellers exceeding $100,000 in sales in the state.
• Use destination-based sourcing for calculating local tax rates.

Software as a Service (SaaS)

• SaaS is generally considered taxable in Kansas.
• Apply the combined state (6.5%) and local tax rates based on the purchaser's location.

Services

• Most services are exempt from sales tax unless expressly stated as taxable.
• Check specific service types for any exceptions.

Additional Considerations

• Review any special rates or exemptions that may apply.
• Keep updated on changes in state or local tax rates.

Complete the Tax Calculation

• Ensure all computed sales taxes are added to the total sale amount.
• Record and report sales tax accurately per Kansas tax regulations.

Understanding use tax in Kansas

Understanding Use Tax in Kansas (2024)

Use tax in Kansas is a companion to sales tax and applies to purchases made outside the state for use within Kansas when the sales tax has not been collected during the transaction. Both businesses and individuals are responsible for remitting use tax if these criteria are met.

In 2024, Kansas maintains a state use tax rate of 6.5%, although additional local use taxes may apply depending on jurisdiction. When buying goods or services from an out-of-state supplier, such as via online shopping or catalog orders, if the supplier does not collect Kansas sales tax, the purchaser must pay the use tax directly to the Kansas Department of Revenue.

The primary purpose of use tax is to ensure that out-of-state purchases are taxed equivalently to in-state purchases, maintaining fair competition among retailers and fairness in the state's tax system. Items subjected to use tax include tangible personal property, digital goods, and taxable services used within Kansas.

For businesses, remitting use tax typically involves filing regular returns, either monthly, quarterly, or annually, depending on the volume of taxable purchases. Individuals, on the other hand, often report and pay use tax annually when filing state income taxes.

Compliance can be enforced through audits, and failure to report use tax accurately may result in penalties and interest. Therefore, keeping detailed records of out-of-state purchases is crucial to ensure that all use tax liabilities are met.

Understanding and fulfilling use tax responsibilities ensures that individuals and businesses contribute appropriately to the state's revenue, supporting public services and infrastructure. By doing so, everyone plays a part in upholding Kansas's fiscal health and economic equity.

Recent changes to Kansas sales tax

In 2024, Kansas implemented several changes to its sales tax regulations. These adjustments reflect the state's efforts to update its tax policies and address economic considerations, especially in comparison to 2023.

Effective January 1, 2024, the general state sales tax rate was revised, coming down from 6.5% in 2023 to 6.3%. This slight reduction aims to ease the tax burden on consumers and stimulate spending.

Several adjustments were also made to the sales tax on groceries. In 2023, the tax rate on food and food ingredients stood at 6.5%, the same as the general rate. However, starting July 1, 2024, the state introduced a reduced rate of 4.0% on these items, representing a significant step towards tax relief on essential goods.

The state also broadened its tax base by incorporating digital goods and services more comprehensively. Kansas started applying sales tax to streaming services and other digital subscriptions in 2023 at 6.5%. This rate remains constant at 6.3% in 2024, aligned with the general reduction in the sales tax rate.

Additionally, the 2024 tax reforms saw a change in the taxation of certain professional services. Where professional services were previously exempt, from March 1, 2024, a standard sales tax rate of 6.3% now applies to a selected range of services, bringing alignment with the general sales tax rate.

Effective September 1, 2024, Kansas eliminated the sales tax exemption for services related to data processing and information services, which were previously taxed at a lower rate of 2.5% in 2023. These services are now subject to the full 6.3% rate.

Lastly, the local sales tax rates, including the Wichita KS sales tax and the Topeka KS sales tax, which are set by municipalities within Kansas, were permitted more flexibility in 2024. While these rates varied significantly in 2023, caps were adjusted to allow local governments to raise rates by up to an additional 0.5% without state approval, thereby providing greater autonomy in addressing local financial needs.

These changes reflect Kansas' strategy to balance revenue generation with consumer relief and economic growth.

Excise and discretionary taxes and other sales tax considerations in Kansas

Certainly! As of my knowledge cutoff in October 2021, I don't have the latest data for 2024, but I can provide a general overview of excise, discretionary taxes, and sales tax considerations in Kansas that may still be relevant.

Sales Tax

State Sales Tax

Kansas has a statewide sales tax rate of 6.5%. However, local jurisdictions such as cities, counties, and special districts may impose additional sales taxes. These local taxes can vary, so the total sales tax rate you pay can differ depending on the location where the sale takes place.

Use Tax

Kansas also imposes a use tax on items purchased out-of-state but used in Kansas. The rate is generally equivalent to the combined state and local sales tax rate.

Excise Taxes

Alcohol

Kansas imposes excise taxes on alcoholic beverages. For example, beer, spirits, and wine each have specific tax rates.

Tobacco

There are excise taxes on tobacco products. These rates can include a per-pack tax on cigarettes and a percentage of the wholesale price for other tobacco products.

Motor Fuels

Kansas imposes a motor fuel tax on gasoline, diesel, and other motor fuels. This tax is collected at the wholesale level but impacts consumers as it is generally passed on through the retail price.

Vehicles

When purchasing a vehicle, Kansas imposes a motor vehicle registration fee as well as a one-time sales tax on the purchase price. There may also be an excise tax on rental vehicles.

Discretionary Taxes

Transient Guest Tax

This is a tax on the gross receipts derived from or paid by transient guests for sleeping accommodations. Local jurisdictions can levy this tax, and rates can vary.

Special Considerations

Special Districts

Certain areas, such as special benefit districts, may have additional sales taxes. These districts are created for specific purposes (like community development or transportation) and may add a tax that only applies within their boundaries.

Tax Holidays

Kansas does not typically have sales tax holidays like some other states do. However, always check for any updates as these policies can change with new legislation.

Exemptions

Kansas law provides for various sales and use tax exemptions for specific goods and services. Common exemptions include items purchased for resale, certain medical supplies and equipment, and some agricultural products.

To get the most accurate and current information for 2024, I recommend checking the Kansas Department of Revenue website or consulting with a tax professional.

Understanding nexus in Kansas for local and out-of-state sellers

Physical nexus

In 2024, Kansas maintains significant physical nexus standards for sales tax, impacting how businesses operate. Comparing to 2023, several changes stand out:

Presence Standards

In 2023, Kansas required a business to have a physical presence, such as owning or leasing property or maintaining an office within the state. In 2024, this criterion expands slightly to include more temporary presences such as renting spaces for short-term events or trade shows.

Employee Presence

In 2023, having employees in Kansas, even occasionally, created a nexus. By 2024, the state emphasizes this further, counting even remote employees who engage in significant activities related to sales.

Inventory Storage

Kansas upheld that storing inventory in the state created a nexus in 2023. For 2024, this now explicitly includes inventory held in third-party warehouses or fulfillment centers, ensuring more comprehensive capture of businesses utilizing such services.

Installation and Services

In 2023, physical nexus was established through any installation or maintenance services within Kansas. This expands in 2024 to cover a broader range of post-sales services, reflecting an increased emphasis on comprehensive service engagements.

Trade Shows and Events

In 2023, attending trade shows for specific timeframes established physical nexus. In 2024, Kansas lowers the threshold for time spent at events, thus creating nexus after shorter participation durations.

Affiliate Nexus

Kansas in 2023 recognized affiliate nexus if associated businesses within the state generated sales through referrals. In 2024, this extends to affiliates conducting extensive marketing campaigns that target Kansas residents specifically.

These changes in 2024 enhance Kansas's ability to identify and tax businesses with any meaningful physical interaction within the state, underscoring a tightening and expansion of the previous year’s nexus standards.

Economic nexus

In 2024, Kansas continues to enforce economic nexus for sales tax, which requires out-of-state sellers to collect and remit sales tax if their sales exceed a certain threshold. For the year 2024, the primary provisions and changes are as follows:

Threshold

The threshold for economic nexus in Kansas remains at $100,000 in annual gross sales into the state, same as in 2023.

Transaction Count

Kansas does not consider the number of transactions for economic nexus purposes, similar to its 2023 regulation.

Registration Requirement

Out-of-state sellers meeting the threshold must register with the Kansas Department of Revenue and comply with sales tax collection and remittance obligations, unchanged from 2023.

Marketplace Facilitators

Marketplace facilitators are required to collect and remit sales tax on behalf of third-party sellers if the facilitator's annual gross sales into Kansas exceed $100,000. This is consistent with the 2023 requirements.

Filing Frequency

Sellers are required to file sales tax returns based on their sales volume. Annual, quarterly, or monthly filing frequencies apply, as determined by the Kansas Department of Revenue, retaining the same structure as in 2023.

Penalties and Compliance

Non-compliance with economic nexus laws results in penalties and interest, identical to the enforcement measures from 2023.

Exemptions

Certain sales, including those to tax-exempt organizations and sales of exempt goods, are not subject to economic nexus obligations, following the same exemption categories as in 2023.

The economic nexus standards for Kansas in 2024 largely mirror those in place for 2023, maintaining consistency in thresholds, marketplace facilitator responsibilities, registration, and compliance requirements. There have been no significant alterations in the foundational criteria and enforcement measures from 2023 to 2024.

Affiliate nexus

In 2024, Kansas has implemented updated regulations for affiliate nexus concerning sales tax. Here's a comparison with the rules in place for 2023:

Remote Seller Threshold

In 2024, Kansas continues to require remote sellers exceeding $100,000 in gross sales to collect and remit sales tax. This mirrors the 2023 threshold, indicating no change.

Affiliated Entities

Kansas now broadens the definition of "affiliate" to encompass relationships where an entity uses in-state facilities or employees for integration with Kansas-based operations. In 2023, the term was more narrowly defined, primarily focusing on shared marketplace usage.

Marketplace Facilitators

The 2024 regulations extend responsibilities to marketplace facilitators, obligating them to collect sales tax on behalf of third-party sellers once aggregate sales surpass $100,000. While this was already a rule in 2023, the 2024 guidelines reinforce compliance measures and clarify ambiguities.

Click-Through Nexus

Kansas has maintained its click-through nexus provision from 2023 into 2024, where sales referrals leading to a $10,000 sales threshold necessitate tax collection. Comparatively, no changes were made to this aspect for the new year.

In-State Reps or Affiliates

A significant 2024 update requires businesses with in-state representatives or affiliates facilitating significant business activities to collect sales tax. This stipulation amplifies 2023's looser guidelines, which mainly targeted physical presence without emphasizing business facilitation.

Interstate Commerce Clause Compliance

Kansas has refined its adherence to the Interstate Commerce Clause in 2024, ensuring out-of-state businesses find the tax obligations reasonable and non-discriminatory. The clearer language rectifies the vagaries present in the 2023 legislation.

In summary, Kansas' 2024 regulations on affiliate nexus for sales tax reflect a mix of continuity and refinement from 2023, aiming for broader applicability and clearer compliance directions for businesses.

Click-through nexus

In 2024, Kansas continues to enforce its click-through nexus rules for sales tax, which were established for remote sellers to create tax liability when certain criteria are met.

The key aspects of click-through nexus rules in Kansas are:

• 2024: Remote sellers must collect and remit sales tax if they generate over $100,000 in gross sales from Kansas customers over the previous or current calendar year due to referrals by in-state residents through a link on a website or other types of affiliate marketing.
• Contracts with Residents: Contracts or agreements where Kansas residents refer potential customers through links or other methods are crucial. If these referrals lead to sales surpassing the $100,000 threshold, the remote seller will be required to comply with these nexus obligations.
• Compliance Obligations: Sellers meeting these thresholds must register with the Kansas Department of Revenue, collect the applicable sales tax, file returns, and remit the collected taxes to the state.
• Enforcement and Penalties: The Kansas Department of Revenue will continually monitor compliance and can impose penalties or interest on remote sellers that fail to meet their obligations under the click-through nexus laws.

Comparison to 2023:

• Threshold Consistency: The $100,000 sales threshold remains consistent from 2023 to 2024. There was no increase or decrease in the threshold required to establish nexus.
• Referral-Based Obligations: Similar to 2023, the primary basis for creating nexus in 2024 hinges on sales generated through referrals by Kansas residents. There have been no major structural changes to this approach.
• Compliance Procedures: The procedures for registration, tax collection, filing, and remittance enforceability have not seen significant changes from 2023. Sellers are expected to follow the same steps as mandated in the previous year.
• Penalties: Penalty structures for non-compliance with click-through nexus rules remain largely unchanged from 2023. Remote sellers face the same potential fines and interest for delinquent tax activities.

Kansas maintains a stringent regime for remote sellers, reflecting a consistent approach in 2024 as in 2023 to capture taxation from out-of-state enterprises engaging Kansas consumers through online referrals.

Marketplace nexus

Threshold for Sales Tax Collection: In 2023, Kansas had a threshold where remote sellers and marketplace facilitators needed to collect and remit sales tax if they had $100,000 in annual sales in the state. In 2024, this threshold remains the same at $100,000 in annual sales.

Definition of Marketplace Facilitators

In 2023, Kansas defined marketplace facilitators as entities that facilitate sales for sellers by listing products and collecting payments. The definition has not changed in 2024; entities that meet this role are still considered marketplace facilitators and must collect and remit sales tax.

Types of Transactions Covered

Both in 2023 and 2024, the law requires that marketplace facilitators collect and remit sales tax on all sales facilitated through their platform, irrespective of whether the transaction is with an in-state or out-of-state seller.

Registration Requirements

Registration requirements for marketplace facilitators and remote sellers remain consistent into 2024. Businesses reaching the $100,000 threshold must register for a sales tax permit and file returns electronically, similar to the requirements in 2023.

Filing Frequency

The filing frequency for sales tax returns in 2023 was largely dependent on the amount of tax collected; smaller collectors filed quarterly, while larger collectors filed monthly. There have been no adjustments to this schedule in 2024.

Penalties and Enforcement

In 2023, Kansas imposed penalties for non-compliance, including late filing fees and interest on overdue taxes. These penalties have not been heightened or reduced in 2024.

Exemptions

Certain exemptions valid in 2023, such as those for resellers or exempt organizations, continue to be applicable in 2024, and marketplace facilitators must ensure they handle exempt sales correctly.

Documentation and Record-Keeping

Requirements for maintaining accurate records and documentation, crucial in 2023, remain equally emphasized in 2024 to ensure compliance and verify the accuracy of tax filings.

Trade shows

In 2024, businesses participating in tradeshows in Kansas must be aware of certain sales tax obligations:

Sales Tax License

Obtain a sales tax license from the Kansas Department of Revenue (KDOR) before making any sales at tradeshows.

Sales Tax Collection

Collect the appropriate state and local sales tax rates on all taxable goods sold within Kansas.

Filing Frequency

File sales tax returns periodically, which could be monthly, quarterly, or annually, as determined by the KDOR.

Exempt Sales

Document exempt sales properly using resale or exemption certificates to avoid penalties.

Record-Keeping

Maintain detailed records of sales transactions, including date, items sold, sales price, and sales tax collected.

Temporary Vendors

Temporary vendors at tradeshows must adhere to the same sales tax requirements as permanent businesses.

Tax Rate Determination

Use the destination-based sales tax rate, which is based on the location where the buyer takes possession of the goods.

Penalties and Interest

Pay taxes on time to avoid penalties and interest for late payments.

Taxable Goods

Be aware of which items are subject to sales tax, as Kansas taxes most tangible personal property and certain services.

Use Tax

If items are purchased for resale and later used personally, remit use tax accordingly.

Fulfillment by Amazon and nexus

Fulfillment By Amazon (FBA) is a service provided by Amazon whereby sellers store their products in Amazon's fulfillment centers. Amazon handles storage, packaging, shipping, customer service, and returns for these products. Sellers benefit from Amazon's vast logistics network and can focus more on other aspects of their business.

Sales Tax Obligations in Kansas for FBA sellers in 2024:

• Kansas requires remote sellers to collect and remit sales tax if they have economic nexus in the state. This typically means $100,000 or more in sales to Kansas customers within the current or immediately preceding calendar year.
• Amazon, as a marketplace facilitator, is responsible for collecting and remitting Kansas state sales tax on behalf of third-party sellers for sales made through the Amazon platform.
• FBA sellers must ensure they comply with Kansas tax registration and filing requirements if they sell through channels other than Amazon or if they meet Kansas' economic nexus threshold through other channels.
• Kansas' state sales tax rate is 6.5%, but local rates can vary, making the combined rate higher in certain jurisdictions.
• FBA sellers who are required to collect Kansas sales tax must remit it electronically to the Kansas Department of Revenue and file regular sales tax returns.
• BDAs (Business Development Agreements) and tax incentives may be available for businesses investing in warehouse and distribution centers in Kansas. Such incentives can impact the overall tax obligations and benefits for FBA sellers with significant operations in the state.
• Sellers must maintain detailed records of all transactions and taxes collected, as state authorities periodically conduct audits to ensure compliance.

Permits, certificates and sales tax registration in Kansas

To register for sales tax in Kansas in 2024, businesses must first gather essential information such as their federal Employer Identification Number (EIN) or Social Security Number (SSN) for sole proprietors. They should also have details about their business structure and activities. Registration is completed online through the Kansas Department of Revenue's Customer Service Center. Once registered, businesses will receive a sales tax registration certificate, enabling them to collect and remit sales tax to the state.

Registering for sales tax collection in Kansas

Registering for sales tax collection in Kansas in 2024 involves several steps. Here’s a general guide on how to do it:

Determine Your Need to Register

• Identify Nexus: Confirm that your business activities meet the criteria for economic nexus in Kansas, meaning you have sufficient physical presence or economic activity in the state to be required to collect sales tax.

Gather Required Information

• Business Details: Have your business name, address, and contact information ready.
• Employer Identification Number (EIN): This is issued by the IRS.
• Ownership Information: Details about the owners or officers of the business.
• Bank Information: For payment purposes, you might need bank account details.
• Description of Business Activities: Clearly outline what products or services your business will be selling.

Complete the Application

• You will need to fill out the appropriate forms to register for sales tax collection. These forms are typically available from the Kansas Department of Revenue (KDOR). In Kansas, you can register online through the KDOR Customer Service Center or by completing paper forms if you prefer.

Online Registration

• Create an Account: If you opt for online registration, first create an account on the KDOR Customer Service Center website.
• Complete the Application: Fill out the application by providing the gathered information. Be thorough and accurate.

Paper Registration

• Download Form CR-16 (Kansas Business Tax Application): If using paper forms, you’ll need Form CR-16.
• Fill Out the Form: Provide all required information and ensure it is legible and accurate.
• Mail the Form: Send the completed form to the address provided on the form.

Application Review

• Processing Time: The review and processing time may vary. Typically, it might take a few days to a few weeks.
• Approval or Additional Information: You may either receive an approval or a request for additional information if needed.

Receive Your Sales Tax Permit

• Once approved, you will receive your sales tax permit. You can then legally collect sales tax in Kansas.

Begin Collecting and Remitting Sales Tax

• Collect Sales Tax: Start collecting sales tax on applicable sales.
• File Returns: File sales tax returns regularly (monthly, quarterly, or annually, depending on your volume of sales) through the KDOR Customer Service Center.

Stay Compliant

• Maintain Records: Keep detailed records of all sales and tax collected.
• Update Information: If there are any changes to your business information, promptly update the KDOR.

These steps should help you get started with registering for sales tax collection in Kansas in 2024. Always make sure to check for any updated procedures or requirements from the KDOR as policies and forms can change.

Cost of registering for sales tax in Kansas in 2024

In Kansas, registering for a sales tax permit is free. There is no cost associated with obtaining a sales tax permit in 2024, as it has been in previous years. You can apply for it through the Kansas Department of Revenue.

Federal tax ID requirements for registering

Yes, you generally need an Employer Identification Number (EIN) when registering for sales tax in Kansas. An EIN is used to identify your business entity and is often required during the registration process for state and federal tax purposes.

To obtain an EIN, you can apply through the IRS (Internal Revenue Service). You can do this online, which is the fastest method, or by other means such as fax or mail.

Here’s how to apply for an EIN online:

• Go to the IRS EIN application page: Apply for an Employer Identification Number (EIN) Online
• Follow the instructions provided on the IRS website to complete your application.

Once you have your EIN, you can proceed with the registration for sales tax in Kansas.

To register for sales tax in Kansas:

• Go to the Kansas Department of Revenue (KDOR) Customer Service Center: Kansas Department of Revenue - Customer Service Center
• Create an account or log in if you already have one.
• Follow the prompts to register for your sales tax permit.

Make sure you have your EIN handy during the registration process. If you need any assistance, the KDOR website also provides various resources and contact information for support.

Streamlined sales tax program and Kansas

Yes, Kansas is a member of the Streamlined Sales Tax (SST) program. The Streamlined Sales Tax Governing Board, Inc. works with member states to simplify and modernize sales and use tax administration in order to reduce the burden of tax compliance. Kansas is among the states that have adopted measures to conform to the SST Agreement.

Acquiring a business and registering for sales tax in Kansas

Certainly! If you're acquiring a business in Kansas and need to register for sales tax, you'll need to follow these general steps:

Obtain a Federal Employer Identification Number (FEIN)

This is necessary if your business will have employees, it's a corporation or partnership, or if you're required to file certain tax returns.

Register with the Kansas Department of Revenue (KDOR)

You can register online through the Kansas Department of Revenue Customer Service Center.

Submit Form CR-16

This is the Business Tax Application form. You'll need to provide details about your business, including ownership information, the nature of the business, and any previous tax IDs if applicable.

Provide Information on Previous Owner

Since you're acquiring an existing business, you may need to furnish information regarding the previous owner and any outstanding tax liabilities. Ensure all tax obligations of the previous owner are cleared to avoid any complications.

Obtain a Sales Tax Certificate

Once registered, you'll receive a Sales Tax Certificate, which allows you to collect sales tax from your customers. Display this certificate at your business location.

Stay Updated on Filing Requirements

Understand your filing frequency, which could be monthly, quarterly, or annually, depending on estimated sales tax collections. Make sure to file and pay any collected sales tax on time to avoid penalties.

This summarizes the process. Specific details can vary, so it's always wise to consult with a tax professional or directly with the Kansas Department of Revenue to ensure you're meeting all requirements.

Other Kansas registrations to consider

When operating a business in Kansas in 2024, besides sales tax registration, there are several other registrations and considerations you might need to address:

Business Registration

You need to register your business entity with the Kansas Secretary of State. This applies whether you are forming an LLC, corporation, partnership, or other business structure.

Employer Identification Number (EIN)

If you have employees or operate as a corporation or partnership, you will need to obtain an EIN from the IRS.

Kansas Department of Revenue

Beyond collecting sales tax, you may also need to register for other state taxes such as withholding tax if you have employees, or specific excise taxes depending on the goods or services you offer.

City and County Licenses

Different cities and counties in Kansas may have their own licensing requirements, so you should check with local municipalities.

Industry-Specific Permits

Depending on your business, you might need specific state or local permits. For example, businesses dealing with food and beverage, health services, or construction might have additional regulatory requirements.

Federal Permits or Licenses

Certain types of businesses also require federal permits, especially those involved in activities regulated by federal agencies, such as agriculture, firearms, alcohol, or transportation.

Trade Name Registration (DBA)

If you are using a trade name different from your registered business name, you may need to file a "Doing Business As" (DBA) registration.

Professional Licenses

Certain professions require a state-issued license or certification (e.g., doctors, lawyers, accountants).

Unemployment Insurance

If you have employees, you will need to register for unemployment insurance with the Kansas Department of Labor.

Workers' Compensation Insurance

If you have employees, Kansas law requires most businesses to carry workers' compensation insurance.

Make sure to research specific requirements that apply to your type of business to ensure full compliance. Each business scenario might have unique needs, so it’s advisable to consult with a legal or business advisor for personalized guidance.

Requirements for online sellers in Kansas

In Kansas, online sellers are required to collect and remit sales tax if they have a physical presence in the state or meet certain economic nexus thresholds. As of 2024, Kansas follows the principles established by the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc.

Here are some key points for online sellers regarding sales tax collection in Kansas:

Physical Presence

If your business has a physical presence in Kansas—such as a store, warehouse, or office—you are required to collect and remit sales tax on sales made to Kansas residents.

Economic Nexus

If your business does not have a physical presence in Kansas but exceeds a certain threshold of sales to Kansas customers, you are still required to collect and remit sales tax. The current threshold is $100,000 in Kansas sales in the current or previous calendar year. This includes total sales, not just taxable sales, of tangible personal property and services delivered into Kansas.

Marketplace Facilitators

If you sell through a marketplace facilitator (e.g., Amazon, eBay), the facilitator is required to collect and remit the sales tax on your behalf, provided they meet the economic nexus thresholds.

Registration

Online sellers meeting the physical presence or economic nexus criteria must register with the Kansas Department of Revenue to collect and remit the appropriate sales tax. This can typically be done online.

Filing and Remittance

Once registered, sellers are required to file periodic sales tax returns and remit the collected taxes to the state. The frequency of filing (monthly, quarterly, or annually) depends on the volume of sales.

Exemptions

Certain sales may be exempt from sales tax, such as sales to tax-exempt organizations or resales to retailers. Be sure to understand and document these exemptions properly.

It's important to stay informed about any changes to state tax laws, as they can impact your obligations as an online seller. If you're unsure about your specific requirements, consulting with a tax professional can provide clarity tailored to your business needs.

Collecting sales tax in Kansas

In 2024, Kansas requires businesses to collect sales tax on most goods and services sold within the state. Understanding the current rates, exemptions, and filing procedures is essential for compliance. This guide provides an overview of the necessary steps to ensure accurate sales tax collection in Kansas.

Understanding origin vs. destination sales tax collection

As of 2024, Kansas is an origin-based sales tax collection jurisdiction. This means that sales tax is collected based on the location where the sale is made rather than the destination of the goods or services. In Kansas, retailers are required to collect sales tax at the rate applicable at their business location for in-state sales.

Taxable products in Kansas

In Kansas, sales tax is applied to a broad range of product categories. As of 2024, the sales tax applies to:

General Merchandise

This includes a wide array of items such as clothing, electronics, appliances, furniture, and household goods.

Groceries

Sales tax is applied to both food and beverages sold at grocery stores, although certain essential food items may sometimes qualify for tax reductions or exemptions under specific programs.

Prepared Foods

Items like restaurant meals, ready-to-eat foods, and catered events are subject to sales tax.

Automobiles and Other Vehicles

Sales of cars, trucks, motorcycles, and other motor vehicles are taxed.

Gasoline and Fuel

Taxes are levied on the sale of gasoline and other fuels, often included in the price at the pump.

Utilities

Utility services, including electricity, water, natural gas, and telecommunications services, are also taxable in Kansas.

Alcohol and Tobacco

Sales of alcoholic beverages, tobacco products, and related items are subject to the state sales tax.

Digital Products

This includes downloadable software, digital audio-visual works, digital audio works, and digital books.

Services

Certain services, such as repair and maintenance, landscaping, and construction, can also be taxable, although this can vary and may be subject to specific conditions or exemptions.

Please note that tax laws and applications can change, and there are often specific nuances and exceptions within each category. It's always a good idea to consult the Kansas Department of Revenue or a tax professional for detailed and current information.

Non-taxable products in Kansas

Sure, I can provide an overview of product genres that are typically exempt from sales tax in Kansas as of 2024. However, do keep in mind that tax laws and regulations can change frequently. Here are some common product genres that are often exempt from Kansas sales tax:

Certain Groceries

Basic food items for home consumption often qualify for partial exemptions or reduced rates, though prepared food is usually taxable.

Prescription Medications

Medicines prescribed by a healthcare professional are generally exempt from sales tax.

Medical Devices

Certain medical equipment and supplies prescribed by a doctor may also be exempt.

Agricultural Equipment

Equipment and machinery used in farming may qualify for tax exemptions.

Manufacturing Equipment

Machinery used directly in the manufacturing process can be exempt from sales tax.

For the most accurate and up-to-date information, things are changing all the time, so please refer to the Kansas Department of Revenue for more information about taxable items within Kansas.

Remember, tax regulations are subject to change, so it's always a good idea to check the latest guidelines directly from the Kansas Department of Revenue.

Is SaaS taxable in Kansas?

In Kansas, Software as a Service (SaaS) is generally considered taxable. The state views SaaS as a service that includes software maintenance, updates, and support, which are subject to sales tax. Businesses should ensure compliance by factoring these tax obligations into their pricing and accounting practices.

Are digital products taxable in Kansas?

In Kansas, as of 2024, digital products such as e-books, music downloads, and online streaming services are subject to sales tax. The state treats these digital goods similarly to tangible personal property, necessitating their inclusion in tax calculations for consumer purchases.

Are services taxable in Kansas?

In Kansas, most services are not subject to sales tax, but there are exceptions. Taxable services include ones related to installing or maintaining tangible personal property, telecommunications, and admissions to events. Always verify specific services with state tax regulations to ensure compliance.

Sales tax exemption certificates

Sales tax exemption certificates in Kansas allow certain purchases to be made without paying sales tax, typically when the items are for resale or used in a tax-exempt manner. To qualify, buyers must provide a valid certificate to the seller at the time of purchase. The seller must keep these certificates on file to prove the tax-exempt status of the sale. Eligible entities may include nonprofits, government agencies, and certain businesses making qualifying purchases like manufacturing equipment or agricultural supplies. Misuse of exemption certificates can result in penalties, so proper documentation and compliance with state regulations are crucial.

State tax holidays in Kansas for 2024

Sales tax holidays are designated periods when specific products are exempt from sales taxes, aiming to boost consumer spending and ease financial burdens.

Kansas does not have any sales tax holidays in 2024.

Filing sales tax returns in Kansas

To file sales taxes in Kansas for the year 2024, follow these steps:

• Register for a Sales Tax Permit: Apply through the Kansas Department of Revenue (KDOR) to get a permit.
• Collect Sales Tax: Charge the correct sales tax rate at the point of sale.
• Keep Accurate Records: Maintain detailed sales records for tax purposes.
• Calculate Total Sales Tax: Summarize all collected sales tax for the reporting period.
• File Sales Tax Return: Access the KDOR Customer Service Center to file your return online.
• Report Zero Sales: If no sales were made, file a zero return to remain compliant.
• Pay Sales Tax: Submit the due tax payment electronically through the KDOR system.
• File on Time: Ensure timely filing to avoid penalties and interest.
• Review Confirmation: Save the filing confirmation for your records.

For more information, visit the Kansas Department of Revenue's Sales Tax Page.

Sales tax filing frequency

In Kansas, the frequency with which businesses must file sales tax returns is determined by the amount of sales tax they collect, which places them into specific filing frequency categories: monthly, quarterly, or annually.

Monthly Filing

Businesses with average annual taxable sales exceeding $4,000 are required to file and remit sales tax on a monthly basis. These returns must be filed by the 25th day of the month following the month in which the sales were made. For instance, sales made in January need to be reported and paid by February 25th.

Quarterly Filing

Businesses whose average annual taxable sales are between $1,200 and $4,000 file their sales tax returns quarterly. The due dates for these filings are set on the 25th of the month following the end of each quarter. Therefore, returns for the first quarter (January to March) are due on April 25th; for the second quarter (April to June) on July 25th; for the third quarter (July to September) on October 25th; and for the fourth quarter (October to December) on January 25th of the following year.

Annual Filing

Businesses with annual taxable sales below $1,200 file their sales tax returns annually. These businesses must file by January 25th of the following year, covering all sales for the previous year.

In addition to these standard frequencies, Kansas requires all businesses to file sales tax returns electronically, regardless of their payment amount. Businesses must remain attentive to their taxable sales throughout the year to ensure they comply with the correct filing frequency. Failure to comply with the filing deadlines can result in penalties and interest charges. It’s prudent for businesses to regularly review their sales levels and adjust their filing frequency in accordance with Kansas Department of Revenue guidelines.

Filing when no sales tax has been collected

If no sales tax is collected while registered for sales tax in Kansas in 2024, the business is still required to file a sales tax return. The return must report zero sales tax collected, but it must be filed to avoid penalties for non-compliance. Failure to file can result in fines, interest on unpaid taxes, and potential audits. Additionally, the business may be scrutinized for possible misreporting or underreporting of sales. Timely and accurate filing ensures adherence to state tax laws and avoids potential legal issues.

Penalties for late filing and non-payment of sales taxes

In Kansas, timely filing and payment of sales taxes is crucial for businesses to stay compliant with state regulations. Late sales tax filing occurs when a business does not submit its sales tax return by the due date. The Kansas Department of Revenue typically requires monthly, quarterly, or annual filings, depending on the business's tax liability. Filing late can result in penalties, interest on the unpaid tax amount, and potential legal consequences. The penalty generally includes a percentage of the unpaid tax per month, with a maximum cap, and interest accrues daily until the full amount is paid.

Non-payment of sales taxes in Kansas is a serious issue that can have significant repercussions. Businesses that fail to remit collected sales taxes are effectively misusing state funds, which can lead to severe penalties. These can include fines, additional interest, liens on business property, and even criminal charges for fraud in extreme cases. The state has the authority to garnish bank accounts or seize assets to recover unpaid taxes. To avoid these penalties and ensure compliance, businesses should diligently track sales, accurately report taxes, and remit payments promptly.

Maintaining compliance with sales tax regulations involves regular monitoring and timely action to prevent the accrual of penalties, interest, and other enforcement measures by the state of Kansas.

Sales tax discounts and incentives

In Kansas, various sales tax incentives and discounts are available to businesses in 2024 to foster economic growth and support local enterprises:

Machinery and Equipment Exemption

Businesses can benefit from a sales tax exemption on the purchase of machinery and equipment used directly in the manufacturing process, telecommunication, and other specified industrial operations.

Enterprise Zone Incentives

Businesses located in or relocating to designated Enterprise Zones may receive sales tax exemptions on materials, equipment, and utilities used within the zone. This program aims to stimulate development in economically disadvantaged areas.

Integrated Production Machinery and Equipment Exemption

This exemption applies to machinery and equipment used in an integrated production operation, covering various activities from initial product handling to final packaging.

Research and Development Equipment

There is a sales tax exemption for equipment purchased for research and development purposes. This is intended to promote innovation and technological advancement within the state.

Warehouse and Distribution Equipment

Equipment used in warehousing and distribution facilities may also qualify for sales tax exemptions, aiming to bolster efficiency and reduce operational costs for logistics operations.

Agricultural Exemptions

Agricultural businesses can benefit from exemptions on sales tax for farm machinery and equipment, addressing the needs of the state's substantial agricultural sector.

These incentives are aimed at enhancing Kansas' competitive edge, encouraging investment, and promoting business expansion across various sectors. Note that specific eligibility criteria and application procedures apply for each incentive program.

2024 sales tax filing due dates for Kansas

Coming Soon

Shipping and sales tax in Kansas

When to pay tax on shipping in Kansas

In the state of Kansas, the taxability of shipping and handling charges depends on various factors, including whether the charges are separately stated and the nature of the sale. As of my last update:

Separately Stated Charges

• If the shipping and handling charges are separately stated from the price of the item being sold, they are generally not subject to sales tax.

Non-Separately Stated Charges

• If the shipping and handling charges are not separately stated and are included in the price of the item, they may be subject to sales tax.

The Kansas Department of Revenue's guidelines can sometimes change, and there might be specific exemptions or additional considerations, so it's always a good practice to verify the details from the latest resources or consult with a tax professional.

To ensure compliance for 2024, you should:

• Review the invoice and billing practices to ensure shipping charges are clearly itemized.
• Stay updated with the Kansas Department of Revenue for any changes in tax laws.
• Consider consulting with a tax advisor who is familiar with Kansas sales tax regulations.

This approach will help ensure that your business manages its sales tax obligations correctly regarding shipping charges.