Kansas Sales Tax Rates

Total Range for 2024

6.5%-10.6%

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Why do you need to collect sales tax in Kansas?

If you’re selling goods and services in Kansas then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  1. Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Kansas, triggers this type. If you do, you likely need to collect sales tax.
  2. Economic Nexus: This kicks in when your sales within Kansas exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

Is what you’re selling taxable in Kansas?

Now that you’ve grasped the basics of Kansas’s sales tax and nexus thresholds, let’s delve into whether your specific products or services are taxable.

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How to register for sales tax in Kansas

To register for sales tax in Kansas, you’ll need to create an account with the Kansas Department of Revenue’s Customer Service Center (https://www.ksrevenue.gov/contactus.html). Here’s a breakdown of the process:

  1. Create an Account: Head to the Customer Service Center link and follow the prompts for registration. This will involve setting up a username, password, and security questions.
  2. Questionnaire: Once logged in, complete the online questionnaire. This will help determine which business taxes you need to register for, including sales tax.
  3. Sales Tax Permit Application: Based on the questionnaire, you’ll likely be directed to apply for a sales tax permit. This might involve filling out an online form (potentially the Business Tax Application, CR-16 form).
  4. Additional Information: Be prepared to provide details about your business during the registration process, such as:
    • Business name and type
    • Federal Employer Identification Number (FEIN)
    • Contact information
    • Business location(s)

How to collect sales tax in Kansas

Here’s how to collect sales tax in Kansas:

  1. Determine the Sales Tax Rate:
  • State Sales Tax: Kansas has a base state sales tax rate of 6.5%.
  • Local Sales Tax: Many cities and counties in Kansas add on local sales tax rates. You’ll need to research the specific rate for the location where your customer is receiving the good or service (destination-based).
  • Combined Rate: Add the state and local rates to find the total sales tax you need to collect.
  1. Charge the Correct Sales Tax:
  • Include the sales tax amount as a separate line item on your invoices or receipts.
  1. Keep Records of Sales Tax Collected:
  • Maintain good records of all sales transactions, including the sales tax collected for each sale.
  1. File and Pay Sales Tax Returns:
  • The Kansas Department of Revenue will determine your filing frequency (monthly, quarterly, or annually) based on the amount of sales tax you collect.
  • You can file and pay electronically through the Kansas Department of Revenue’s online system or by mail using designated forms.
Example:

Let’s say you’re selling a basketball in Wichita, Kansas. Here’s a quick example of calculating the sales tax:

    1. State Sales Tax: Kansas base rate is 6.5%.
    2. Local Sales Tax: Wichita has an additional 1.0% sales tax ([local tax rates can vary, so double-check for your specific location]).
    3. Combined Rate: 6.5% (state) + 1.0% (Wichita) = 7.5% total sales tax.
    4. Sales Price: Imagine the basketball costs $20.
    5. Sales Tax Amount: 7.5% (sales tax) x $20 (price) = $1.50.

FAQs

Do you have a physical nexus in Kansas?

A business has a physical nexus in Kansas, meaning it has a physical presence that triggers sales tax collection obligations, if it has any of the following in the state:

  • Physical Location: Owning or leasing an office, retail store, warehouse, distribution center, or any other place of business in Kansas.
  • Employees: Having employees physically present in Kansas to perform duties related to the sale of taxable goods or services. This could include salespeople, delivery drivers, or even remote workers if their work directly impacts Kansas sales.
  • Inventory: Storing inventory within Kansas, even if through a fulfillment service like Amazon FBA.
  • Sales Representatives: Having salespeople or representatives regularly soliciting business in Kansas. This could include attending trade shows or conferences in the state.
  • Independent Contractors: Hiring independent contractors who perform taxable services within Kansas (depending on the specific service).
Do you have an economic nexus in Kansas?

Kansas also has an economic nexus rule, separate from physical nexus. This means even without a physical presence, out-of-state sellers exceeding $100,000 in annual sales to Kansas customers may need to collect and remit sales tax.

What is use tax in Kansas?

In Kansas, use tax is a companion tax to the sales tax. It applies to purchases of tangible personal property made outside the state that are then used in Kansas. Essentially, it ensures fairness for businesses that collect sales tax within the state.

Here’s a breakdown of Kansas use tax:

  • Rate: The use tax rate is the same as the combined state and local sales tax rate where the item is delivered for use in Kansas. This can range from 6.5% (base state rate) to 10.6% depending on the location.
  • Who Pays:  Kansas residents are generally responsible for paying use tax on out-of-state purchases if the seller didn’t collect Kansas sales tax.
  • Exceptions: There are some exceptions, such as:
    • Items purchased from stores in other states and brought back to Kansas yourself (souvenirs).
    • Items not subject to sales tax in Kansas (groceries, prescription drugs).
  • Filing and Payment: Individuals typically report and pay use tax on their Kansas sales and use tax return.
Do you need a seller/reseller permit?

In Kansas, a seller’s permit, also commonly referred to as a resale certificate or reseller’s permit, is not technically required. However, it’s highly advantageous for most businesses that plan to purchase inventory for resale without paying sales tax upfront.

Here’s why a seller’s permit is important in Kansas:

  • Tax-Exempt Purchases: With a valid seller’s permit, you can buy inventory from wholesalers and distributors tax-free. This can significantly reduce your business costs.
  • Documentation for Suppliers: When you provide your seller’s permit number to your suppliers, it exempts them from collecting sales tax on your purchases.
  • Streamlines Sales Tax Collection: If you don’t have a seller’s permit and resell taxable goods, you’ll be responsible for collecting and remitting sales tax to the state on the retail price you charge customers.

Who Should Get a Seller’s Permit in Kansas?

Generally, any business in Kansas that purchases tangible personal property (physical goods) to resell should obtain a seller’s permit. This includes retailers, wholesalers, and even some online businesses that ship products to Kansas customers.

How to get a sales tax permit/license in Kansas?

In Kansas, a sales tax permit and a seller’s permit (resale certificate) are essentially the same thing. There’s no separate license required for sales tax collection. Here’s how to register for one:

  1. Register with the Kansas Department of Revenue:
  • Head to the Kansas Department of Revenue’s Customer Service Center: https://www.ksrevenue.gov/
  • Follow the prompts to create an account with a username, password, and security questions.
  1. Complete the Online Questionnaire:
  • Once logged in, complete the online questionnaire. This will determine which business taxes you need to register for, including sales tax.
  1. Apply for a Sales Tax Permit:
  • Based on the questionnaire, you’ll likely be directed to apply for a sales tax permit. This might involve filling out an online form like the Business Tax Application (CR-16 form).
  1. Gather Necessary Information:

Be prepared to provide details about your business during registration, such as:

  • Business name and legal structure (sole proprietorship, LLC, etc.)
  • Federal Employer Identification Number (FEIN)
  • Contact information
  • Business location(s)

There’s no fee to apply for a sales tax permit in Kansas, and it doesn’t need to be renewed.

When are Kansas's Returns Due?

The due date for your Kansas sales tax return depends on the filing frequency assigned to your business by the Kansas Department of Revenue (KDOR) based on the amount of sales tax you collect. Here’s a breakdown:

  • Most Common Scenario: For most businesses, Kansas requires sales tax returns to be completed by the 25th day of the month following the tax period.
  • Prepaid Monthly Filers: If your business qualifies as a prepaid monthly filer (typically with high monthly sales tax liability), you’ll file by the 25th day of the taxable month.
  • Annual Filers: Businesses with very low annual sales tax liability (less than $80 per year) might only need to file annually by January 25th of the following year.
How to file sales tax in Kansas

There are three main ways to file sales tax returns in Kansas:

  1. Online Filing:
  • This is the preferred method by the Kansas Department of Revenue (KDOR) and offers the most convenience.
  • You’ll need to create an account with the KDOR Customer Service Center
  • Once logged in, you can access the online filing system to complete your sales tax return and submit payment electronically.
  • The system allows uploading tax data and jurisdiction information, potentially saving time and reducing errors.
  1. Mail Filing:
  • You can file by mail using paper forms provided by the KDOR.
  • There are different forms depending on your situation:
    • Form ST-16: For single jurisdiction filers (businesses operating in one location with one sales tax rate).
    • Form ST-36: For multiple jurisdiction filers (businesses operating in multiple locations with varying sales tax rates).
  • Download the forms and instructions here: https://www.ksrevenue.gov/forms-btreg.html
  • Include your payment with the completed form and mail it to the address specified by the KDOR.
  1. Third-Party Tax Filing Service:
  • You can utilize a tax service and software (like us) that specializes in sales tax filing. These services can automate calculations, filing, and recordkeeping, saving you time and effort.
Is anyone exempt from sales tax in Kansas?

There are two main categories of exemptions for sales tax in Kansas:

Exempt Buyers: Certain entities are exempt from paying sales tax altogether when they purchase goods or services within the state. Here are some examples:

  • Government Agencies: Federal, state, and local government entities are exempt from sales tax on most purchases.
  • Qualifying Non-Profit Organizations: Some non-profit organizations with a 501(c)(3) designation may be exempt for specific purchases related to their charitable or educational missions. However, it’s important to note that not all non-profits qualify for this exemption.
  • Hospitals and Blood Banks: Nonprofit hospitals and blood banks are exempt from sales tax on most purchases.
  • Educational Institutions: Public and private elementary and secondary schools, as well as some non-profit colleges and universities, are exempt from sales tax on most purchases.

Tax-Exempt Goods: Certain types of goods are not subject to sales tax, regardless of who purchases them. Here are some examples:

  • Groceries: Food for human consumption is generally exempt, with some exceptions for prepared or heated food.
  • Prescription Drugs and Medical Equipment: Prescription drugs and certain medical equipment are exempt from sales tax.
  • Farm Machinery and Equipment: Most farm machinery and equipment used for agricultural production is exempt from sales tax.

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