Kansas Sales Tax
Kansas Sales Tax At a Glance
State rate: 6.5%
Maximum combined rate: 11.6%
Tax Holidays: None
Governing Body: Kansas Department of Revenue
There are many rules and regulations concerning when and how much state sales tax should be collected in Kansas. This can often make it difficult to determine whether to collect sales tax and if so, how much. Understanding how to determine if you have nexus in the state is the first step in this process, followed by identifying products on which sales tax must be collected and determining the applicable rate.
Sales Tax Rates in Kansas
Like many states, Kansas has a base sales tax rate set by the state, but cities, counties, and other municipalities can add their own on top of that. The base rate in Kansas is 6.5%, and county and municipal rates can increase the total tax to a higher amount.
This leads to a substantial variation in the actual rate you will need to collect. Kansas has one of the more complicated local-level tax rate systems compared to other states and can vary substantially by location. An updated list of state and local sales/use tax rates can be referenced on the Kansas Department of Revenue website, or you can look up a specific rate using our sales tax calculator.
In Kansas, the state sales tax rate at which you collect is determined by the destination of the product if it’s being shipped or delivered. If you have a physical store, and a customer comes in, purchases a product, and takes it with them on the spot, they will pay the sales tax rate of the store’s location. However, if the customer purchases the item in person and then asks for it to be delivered, the applicable sales tax policy will be that of the delivery destination.
The same is true of items purchased online or over the phone that are shipped directly to the customer. In these instances, the sales tax rate that must be applied is that of the destination of the product, with no consideration of where it originates.
Kansas Sales Tax Nexus Guidelines
When determining whether to collect sales tax in Kansas, you need to consider whether you have a nexus or a significant presence in the state and whether the item being sold is subject to sales tax. You have a nexus and thus a responsibility to collect sales tax if you:
- have a physical office or place of business anywhere in Kansas
- store goods in a warehouse in the state
- have retailers who sell your goods at craft or trade shows in Kansas
- have an employee present in the state on a regular basis
If you sell items through Amazon and those items are stored in an Amazon Fulfillment Center in Kansas, you will be considered to have a nexus as well. To find out if this applies to you, you can pull an inventory report from Amazon Seller Central to see where your items ship from.
Additionally, Kansas implemented a remote seller and marketplace facilitator economic nexus law in May, 2021. There is a $100,000 economic nexus threshold. Individual retailers or marketplace facilitators that make this much in sales to Kansas residents must collect and remit sales tax.
Taxable Items and Exemptions
Of course, you also need to determine whether your items are taxable. In general, services are not subject to sales tax in Kansas, but there are exceptions.
- Services – One such exception is a service that involves installing, repairing, altering, or maintaining a product.
- Prescription Drug and Food Stamp Purchases – On the other hand, most tangible goods are taxable. Excluded from this group, however, are prescription drugs and insulin, along with food stamp purchases and most medical equipment. Exemptions are also available based on a special status of the buyer or a service they provide. Under the latter provision, food sold to companies that provide meals to elderly or homebound people, or products sold to community organizations for the improvement of low income housing are exempt from sales tax. Most of these types of exemptions require the use of an exemption certificate.
- Agricultural Purchases – Other items may be exempt from sales tax based on their intended use. An example of this is agricultural animals being used for agriculture, food production for humans, or in the production of offspring for one of those uses. Goods that are depleted or consumed during certain process, particularly agricultural ones, are also exempt, and this list can include things like pesticides or fuel for agricultural equipment.
It’s also important to note that shipping and handling charges are always taxable in Kansas, even if the items shipped are not, and so the business tax should be calculated only after these charges have been added in. It is up to you whether you list shipping and handling separately or include it in the total price of the item, but either way, it must be clearly stated to the customer how these charges are listed and that all applicable taxes have been applied appropriately. There are some instances where exemption certificates are available depending on the nature of the goods sold.
Registration and Filing
Once you’ve determined that you must collect sales tax in Kansas, you need to register for a Kansas business tax permit. You can do so by visiting the Kansas Department of Revenue website, filling out a paper form and mailing it in. Because processing your request and issuing the permit can take three to four weeks, it’s recommended that you begin the registration process at least that long before you begin making sales in the state.
Of course, when collecting sales tax, you must also file a tax return. The frequency with which you will be required to file will depend on the total amount of tax you expect to collect annually. These ranges include:
- Annual – $80 or less per year collected
- Quarterly – Between $80 and $3,200 per year collected
- Monthly – Between $3,200.01 and $32,000 per year collected
- Pre-Paid Monthly – More than $32,000 per year collected
If you exceed the $32,000 total for the year, you’ll receive a letter from the state Department of Revenue requiring you to file with prepaid monthly status, which means you must prepay either half the expected total for the month or the total for the first 15 days by the 25th of the same month. You should only file with this status if you receive a letter from the state explicitly instructing you to do so.
Kansas Sales Tax Deadlines
Quarterly: The following filing deadlines will apply for those with tax liability between $80 and $3,200 per year.
|January – March (Q1)||April 25|
|April – June (Q2)||July 25|
|July – September (Q3)||October 25|
|October – December (Q4)||January 25|
Monthly: For those with tax liability of more than $3,200 per month, the following filing deadlines will apply.
Annual: For those businesses with liability less than $80 per year, you will file annually by January 25.
Penalties for Late Payment
The state will impose a penalty of 1% of the total tax due for each month that you’re behind in filing or paying, up to a maximum of 24%. However, there may be more extreme penalties for ongoing or repeat offenses, up to and including possible criminal charges for fraud. Kansas requires that you file zero returns for periods in which you collect no sales tax in the state when you hold a Kansas sales tax permit. You can file your tax return online through the Kansas Department of Revenue website, or you can mail the completed form, and the online filing system also allows you to make your payments at the same time.
- Kansas Sales Tax and Compensating Use Tax
- Kansas Department of Revenue website
- Kansas Local Sales Tax Information
Kansas Sales Tax Software
There is much to consider when determining your sales tax liability in Kansas. With so many factors to take into account concerning when and how much sales tax you need to collect on your sales in the state, it can be helpful to have a tool designed to guide you through the process. TaxTools is just such a system, and it offers a variety of resources designed to help you keep track of filing deadlines, local tax rates, and tax holidays. It also stays up to date on any changes to tax laws in the state, so you don’t have to.
TaxTools also integrates seamlessly with many e-commerce platforms, and provides you with up-to-date sales data and payment information to ensure your records are accurate and payments are made on time. This is a particularly valuable tool if you sell in multiple states, as it can track the applicable sales tax data for each state accurately and efficiently.
So if you’re ready to begin streamlining your sales and tax collection processes, click here to learn more or to sign up for a free trial of TaxTools today.
Last updated March 2023