The Kansas sales and use tax is imposed on receipts from sales of tangible personal property and enumerated services.
A use tax is imposed on the purchase and use within Kansas of tangible personal property and enumerated services where sales tax was not charged by the retailer. The state sales and use taxes are imposed at the rate of 6.5%. Localities can impose additional taxes which are administered by the state. Currently, the highest local rate is 4%.
Whereas most states prescribe a single return for reporting sales and use taxes, Kansas requires taxpayers to be registered and file separate returns for each tax type. This often creates confusion for taxpayers who aren’t sure what return to file or even how to register.
There are three primary sales and use tax returns in Kansas as follows:
- Retailers’ Sales Tax – Form ST-36: For retail sales subject to sales tax (typically intrastate transactions).
- Retailers’ Compensating Use Tax – Form CT-9U: For retail sales subject to use tax (charged by the retailer on interstate transactions – where the property originates from a point outside the state of Kansas but is shipped to a point inside the state).
- Consumers’ Compensating Use Tax – Form CT-10: For taxable purchases where the retailer did not charge sales or use tax.
Kansas conforms to the provisions of the Multistate Streamlined Sales and Use Tax Agreement (SSUTA).
For all participating states, the SSUTA sets uniform definitions of sales and use tax terms, a central registration system, simplified local sales and use tax collection procedures, and uniform standards for:
(a) the sourcing of transactions to taxing jurisdictions;
(b) the administration of exempt sales;
(c) the allowances a seller can take for bad debts; and
(d) sales and use tax returns and remittances.
In addition to the multiple returns described above, there are a few nuances to the Kansas sales and use tax program that can make it somewhat challenging for an out of state company to do business in the state.
Be sure to research the tax laws thoroughly before engaging in business in Kansas.
Stay tuned for more of Jeff's EYE ON series as he blogs about sales and use tax State by State.