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Kansas Sales Tax 2022 for Businesses: A Complete Guide

“The statewide sales tax for businesses in Kansas is 6.5%”

 

What Does The Sales Tax For Businesses In Kansas Mean?

 

Simply put, it’s the tax imposed on both consumers and sellers by the government. The one that applies to consumers and corporations when it is about both; buying and sale of services. On the sale of certain services, a sales tax is paid directly to the government.

 

As a business owner selling taxable goods or services, you will act as an agent of the state who can collect tax from purchasers and pass it to the appropriate tax authority. The Kansas Department of Revenue (DOR) is in charge of collecting sales and use taxes.

 

The state of Kansas owns any sales tax received from customers by sellers. It is the job of sellers to keep track of the taxes they collect in order to comply with state and municipal regulations. If one fails to do so, the individual, unfortunately, has to pay fines and interest.

 

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Read More: Arkansas Sales Tax For Businesses: A Complete Guide

 

How Much Is The Sales Tax For Businesses In Kansas?

 

Kansas enacted its first general state sales tax in 1937, and the total tax rate has since climbed to 6.5 percent, depending on the location of the sale. Local sales taxes, special district taxes, and sale taxes are all included, with rates ranging from 0% to 4.1 percent.

 

Kansas Sales Tax 

Threshold Limit

6.5%

$100,000 economic sales threshold limit

 

Do You Need To Collect Kansas Sales Tax For Your Ecommerce Business?

 

If you have a Nexus in Kansas, then collecting sales tax for your eCommerce business is a must. Sellers can connect with the state both physically and economically if they consider the nexus.

 

To justify paying sales tax physically in Kansas, you must have a sufficient actual presence in the state. Whereas economic nexus refers to connecting a state and a business when annual sales revenue exceeds a certain threshold, necessitating sales tax registration. In circumstances where a vendor has an office, holds items in a warehouse, or sells things at events, Kansas requires them to demonstrate physical Nexus. 

 

What Types Of Goods and Services Are Taxable Under Kansas Sales Tax?

 

Taxes on Transactions

 

Kansas charges a destination-based sales tax. Simply put, when a transaction is completed, the buyer’s location will determine the sales tax rates. The sales tax is levied on three types of transactions: retail sales, rentals, and leases of tangible property. Vendors must collect sales tax based on the specific location for orders placed by clients within the state.

 

Taxes on Services

 

In Kansas, services are often not taxed. However, if you provide a service that includes installing, repairing, or maintaining a product, you may be subject to sales tax. With a few exceptions, tangible goods are taxable in Kansas. Necessities like food, groceries, beverages, and construction supplies are a few among them. For commonly items, Kansas’s sales tax rates are explained below:

 

Goods 

Taxability 

Groceries

6.5%

Clothing

6.5%

Prescription Drugs

6.5%

Non-prescription Drugs

6.5%

 

Tax Collection

 

Kansas’s sellers should charge sales tax from buyers based on their destination. The state sales tax rate in Kansas is 6.5% where the local sales tax rate is 1% and the total sales tax rate is 7.5%. Whereas sellers who are based out of the state also have to follow the same process -i.e. Charing sales tax based on the buyer’s location. 

 

Kansas levies a sales tax on the sale of tangible items and certain services. It is the whole responsibility of the vendor to collect the tax and further hand over it to the state tax authorities. De facto, the vendor is a collector. To know whether you need to collect sales tax on Kansas or not, get answered these questions: 

 

Do you have a Kansas Nexus?

Are you selling Kansas residents taxable products or services?

Do your customers have to pay sales tax?

 

If you come in the category of vendors who say yes to all these above questions, your next step is to get you registered with the state tax authorities. Secondly, you need to collect the appropriate amount of sales tax as per transactions, perform return filing, and further pay it to the state. 

 

Note: If you meet the criteria for collecting sales tax but don’t follow them, you will be responsible for the tax dues or penalties. It is extremely important to consider tax collection at the point of sale. 

 

Tax Filling

 

There is mainly three things you need to do when it comes to filing sales tax in Kansas. The very first is calculating how much sales tax you incur, the second is filing a sales tax return, and the last is making a payment. 

Filing and paying Kansas sales tax can be done in three ways – you can file online at the Department of Revenue located in Kansas and remit the payment through an online system. You can also file or pay for Kansas sales tax by mail. For this, you can use form ST-16 or ST-36 for multiple jurisdictions.

How Often Do You Need To File Kansas Sales Tax Return?

 

On applying for the sales tax permit, the state will assign you a filing frequency. This means the frequency is determined by the amount of taxes you collect from state buyers. An individual need to file and pay sales tax in Kansa on a monthly, quarterly, or annual basis. The deadline for Kansas sales tax reports is every 25th day of the month. 

 

What If You Fail To File Your Tax Return Before The Due Date?

 

If you are meeting the requirement for collecting sales tax but still you don’t follow that, you will liable for the tax due and have to pay the penalties. If the tax is not paid by the due date, a penalty of 1% of the outstanding balance of the tax due is levied for each month and up to a maximum of 24%.

 

 How Can We Assist You With Kansas Sales Tax 2022?

 

If you need any kind of assistance with the Kansas Sales Tax in 2022, you can feel free to contact us. Based in Los Angeles, California, FreeCashFlow holds more than 20 years of experience in the tax and accounting field and the highest level of integrity. We help you with your tax and accounting issues in the best possible way.

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