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Navigate Kansas' 2025 sales tax rules with our guide, focusing on compliance, rates, and regulations, and how they impact business and consumers.
Key Takeaways
- Kansas sales tax ranges from 6.5% to 11.5%, depending on local tax rates.
- All vendors with a physical presence in Kansas or more than $100,000 in gross sales in the current or previous calendar year must collect and remit sales tax.
- The penalty for late filings is 1% per month on the balance due, up to a maximum of 24%. Additionally, interest accrues on the unpaid tax at an annual rate determined by the Kansas Department of Revenue.
- Groceries and most services are not subject to sales tax, resulting in lower costs for the end consumer.
The base sales tax rate in Kansas is 6.5%. With local taxes added, the total tax rate can reach 11.5%, depending on the jurisdiction. For example, Wichita has a 1% local tax (in Sedgwick County), so the total sales tax rate is 7.5%.
To calculate Kansas sales tax, multiply the total sales tax rate by the purchase or sale amount. For a $100 sale in Wichita, the sales tax would be $100 x 7.5% = $7.50.
Kansas has over 900 local sales tax jurisdictions, so it's essential to use an automated sales tax calculation system to ensure you’re charging the correct rate.
Sales Tax 101: Most states, including Kansas, charge sales tax on retail sales of certain products and services. This percentage-based tax is added to the final cost of goods and collected at the time of purchase. Its value varies by state and depends on several factors, such as the buyer's location and the type of product or service sold.
Tax legislation can be complicated due to frequent changes, varying rules across states, exemptions, and other aspects you may not be aware of.
That's where Numeral can help. Our end-to-end platform streamlines sales tax filings, registrations, ongoing compliance, and nexus monitoring so you can focus on the core aspects of your business.
Recent tax rate changes
On January 1, 2025, Kansas eliminated the sales tax on food products, including food ingredients, potentially saving consumers $13 million per month. Prior to this change, the food sales tax was 2%.
Note that Kansas updates local sales tax rates quarterly. With Numeral, these changes are tracked and applied automatically, ensuring you stay compliant and stress-free.
Do I need to collect Kansas sales tax?
You must collect sales tax if you’re a retailer with physical or economic nexus in the state. This requirement applies to temporary or seasonal sellers, too.
Nexus: What it means and how it affects your business
Physical nexus
Physical nexus arises when a business has offices, warehouses, brick-and-mortar stores, or other tangible property in a state. It also applies when companies hire employees or contractors, including remote workers, in a given state or jurisdiction.
An example would be a company with retail stores in Kansas, or an online seller with inventory or employees in the state. Even a temporary presence like a trade show booth or pop-up shop can trigger physical nexus.
If your business has a tangible presence in a state, you must collect sales tax on applicable transactions within that state. You're also required to remit the tax to the appropriate government agencies, such as the Kansas Department of Revenue.
Economic nexus
Economic nexus occurs when a vendor reaches a certain level of revenue or sales activity (e.g., transaction count or sales volume) in a state.
For instance, you have an economic nexus in Kansas if you made $100,000 or more in gross sales during the current or previous calendar year. Therefore, you must collect sales tax from Kansas customers and remit it to the state's revenue department.
Out-of-state (remote) sellers
In Kansas, remote sellers without a physical presence in the state are subject to economic nexus laws. This means they must register for, collect, and remit sales tax if they exceed $100,000 in gross sales in the current or previous year.
Is Kansas sales tax destination-based or origin-based?
Kansas is a destination-based state, and, therefore, you must calculate the sales tax rate based on the buyer’s location, or shipping address.
Some states offer a simplified or flat use tax rate for out-of-state sellers, but Kansas does not. This means remote sellers must apply the local rate (based on the buyer’s location in Kansas) for each transaction.
What’s the difference between destination-based and origin-based sales tax states?
In origin-based states like Arizona, Illinois, or Texas, the vendor's location determines sales tax. Therefore, sellers apply the same tax rate to all customers in that state. This rate may include state, county, city, and district taxes.
By comparison, destination-based states require vendors to determine the sales tax rate based on where the buyer resides. This system can be more complex due to the many tax jurisdictions within a state.
You should know: Remote sellers are typically required to charge sales tax at the buyer's location in both origin- and destination-based states.
What's taxable in Kansas?
Most retail sales of tangible personal property are subject to Kansas sales tax. Let’s see a few examples:
- Clothing items
- Computers
- Books
- Construction materials
- Furniture and home decor items
- Prepaid telephone cards
- Cars, trucks, and other motor vehicles
- Meals and drinks served at restaurants, cafés, pubs, etc.
Which ecommerce goods are taxable?
In Kansas, most ecommerce goods are subject to sales tax unless a specific exemption applies. These include but are not limited to:
- Apparel and footwear
- Electronics
- Jewelry
- Home goods
- Sporting goods
- Cosmetics
- Car parts and accessories
- Promotional merch (e.g., mugs, pens, calendars)
Is software-as-a-service (SaaS) taxable in Kansas?
SaaS and other software products hosted online are not subject to Kansas sales tax. Charges for electronically accessing or retrieving information are exempt.
Sales tax exemptions
As of January 1, 2025, groceries are no longer subject to Kansas state sales tax. However, local sales taxes (city and county) may still apply.
Apart from that, vendors are not required to collect sales tax on digital products like music, movies, ebooks, and custom software, which are not considered tangible personal property. Prewritten computer software, on the other hand, is taxable.
Other exemptions to Kansas sales tax include:
- Goods or services sold to the U.S. government, elementary and secondary schools, and certain nonprofit organizations (e.g., museums, hospitals)
- Food products, food ingredients, and certain prepared foods
- Goods intended for resale (e.g., a retailer buys inventory to sell to customers)
- Farm machinery and equipment used in agricultural production
- Integrated production machinery and equipment
- Prescription drugs
- Prosthetic devices sold on prescription
- Propane for agricultural use
- Agricultural animals
- Lottery tickets
- Orthopedic appliances
- Drugs sold to veterinarians
- Warehouse machinery
Excise taxes in Kansas
Kansas collects excise taxes on alcohol, tobacco, motor fuels, and other items at varying rates. Common excise taxes include:
- Liquor drink tax: Clubs, caterers, and other establishments selling alcoholic liquor for on-premises consumption are subject to a 10% excise tax. In Kansas, alcoholic liquor includes wine, spirits, and beer with over 3.2% alcohol by weight.
- Cigarette and tobacco taxes: Kansas charges an excise tax of $1.29 per pack of 20 cigarettes and $1.61 per pack of 25 cigarettes.
- Motor fuels tax: The excise tax on motor fuel is 24¢ per gallon of gasoline and 26¢ per gallon of diesel. These rates have remained unchanged since 2003.
Certain beverages and other products, such as alcohol and tobacco, are subject to additional taxes, regardless of whether they’re consumed on-premises or purchased at retail.
How to register for a Kansas sales tax permit
Companies can register for Kansas sales tax through the state’s Customer Service Center. As part of this process, you must provide essential business information and agree to collect and remit tax on Kansas sales.
Numeral can register your business for a sales tax permit to simplify the process. If you prefer to do it yourself, follow the steps below:
- Access the Kansas Department of Revenue website and click “Customer Service Center” in the top right.
- Scroll down the page and click “Register now.”
- Enter your name, phone number, and email address.
- Choose a strong password and answer the security questions.
- Select “Accounts” from the list under “Settings > Your primary use of this site” and click “Continue.”
- Wait to be directed to a new page and fill out the form with your business information.
I didn't collect any Kansas sales tax. Do I still have to submit a return?
Yes, even if you did not collect any Kansas sales tax, you still need to file a $0 sales tax return for every filing period. Failing to do so can lead to penalties.
Sales tax return filing schedule and due dates
Kansas sales tax returns must be filed monthly, quarterly, or annually, depending on the seller's assigned filing frequency. The due date is the 25th day of the month following the close of the reporting period.
Monthly: High-volume sellers are on a monthly filing schedule. Returns and payments are due on the 25th of the following month, as shown below:
Quarterly: Lower-volume sellers file on a quarterly schedule. Returns and payments are due on the 25th of the month after the quarter closes.
Annual: Temporary and seasonal sellers may qualify for annual filing. The return and payment deadline is January 25th of the following year.
Filing penalties
The penalty for late filing a Kansas sales tax return is 1% per month up to a maximum of 24%.
Interest accrues monthly on any late payments. The annual interest rate is currently 9% (0.75% per month).
Sellers must file and pay in a timely manner to avoid penalties and interest. You may request an extension for the filing date, but you must still pay before the initial deadline.
Kansas audit & appeals process
In a typical Kansas sales tax audit, the auditor reviews your business's records, permits, tax returns, exemptions claimed, and recordkeeping procedures. Here’s what to expect:
- Initial contact and scheduling: The auditor contacts your business to schedule a sales tax audit. Respond promptly to prevent unnecessary delays in the process.
- Entrance interview: He/she conducts an initial interview with you and your staff to understand your business processes, sales channels, record-keeping systems, and how you apply sales tax. Make sure you have your documents in order and provide clear, consistent answers.
- Sampling and transaction testing: Next, they select a sample period (e.g., a few months) and transactions from that timeframe to determine if sales tax was properly charged and remittances. If they discover any issues, they may expand their scope to include more periods or accounts.
- Cross-referencing with financial reports: The auditor reconciles your reported information against multiple sources, such as income tax filings, financial statements, bank records, and income tax returns. Missing or misclassified revenue and other discrepancies must be explained and documented.
- Detailed analysis and verification: Auditors determine if additional sales tax is owed based on exhaustive transaction testing and detailed reconciliation work. For example, failure to collect tax on shipping and delivery charges is a common audit issue and can result in further tax assessments.
- Final report and assessment: After completing the review, the auditor issues a formal report summarizing their findings, including any unpaid tax, along with interest and penalties. If you disagree with the results, consult a sales tax specialist before filing a formal protest or appeal.
When the audit is over, you’ll receive a Notice of Assessment (NOA). This document establishes what you owe and the appeal due date.
Appealing audit findings
You can file an appeal within 60 days of receiving the Notice of Assessment. Include your objections to the assessment, legal or factual grounds for the protest, and supporting documentation.
Grounds for appeal may include:
- Misinterpretation of tax laws
- Procedural errors
- Missing documents (e.g., exemption certificates that were unavailable during the audit)
- Disputes over penalties and interest rates
If the results are still unsatisfactory after discussing them with a problem-resolution officer, you can reach out to the Kansas Board of Tax Appeals (BOTA) within 30 days. Legal counsel is crucial at this stage.
The appeals process is complex, with strict deadlines, so having qualified representation is critical to achieving the best outcome. The state tax professionals at Numeral have handled many audit appeals and achieved significant tax savings for businesses across Kansas.
Sales tax FAQs
How do you calculate Kansas sales tax?
To calculate Kansas sales and use tax, add together the state, county, and city tax rates for your location. Once you have the combined sales tax rate, use this formula to determine what you owe:
Sales tax = Total sale amount × Combined tax rate
The above formula applies to the combined state and local tax rates.
Is Kansas a streamlined sales tax state?
Yes, the state of Kansas became a full member of Streamlined Sales Tax on October 1, 2005. This means it has agreed to simplify and standardize sales tax rules, thereby reducing the burden on businesses and encouraging compliance.
Do I need a Kansas seller's permit if I’m a wholesaler?
You do not need a Kansas seller's permit or sales tax license if you only sell tangible personal property wholesale and don’t make retail sales.
Do I need a Kansas seller's permit if I only sell temporarily in the state?
Yes, even temporary or seasonal sellers in Kansas need a seller's permit if they meet the sales tax nexus thresholds. There are no exceptions for temporary sales activities.
Should you collect sales tax on shipping charges?
As of July 2023, the taxation of delivery charges in Kansas depends on how they are listed on the invoice.
- If the shipping fees are separately stated on an invoice, they are exempt from sales tax. These costs must be clearly labeled as delivery, transmission, or transportation fees.
- If the delivery charges are not separately stated, they remain taxable as part of the total sales price.
Shipping charges for non-taxable goods are not subject to sales tax. However, when a shipment contains both taxable and non-taxable items, the seller must use a reasonable method to determine the tax on delivery charges. Standard methods include pro-rating by sales price or weight.
Are services taxable in Kansas?
Kansas does not tax most services. However, any services that involve installing or applying tangible personal property may be taxable. See the examples below:
- Telecommunication services
- Computer software services
- Certain hotel services (e.g., dry cleaning and laundry services)
- Advertising services
- Utility services
Can I get an extension on filing my Kansas sales tax return?
Kansas allows extensions for filing sales tax returns. The extension only applies to the return filing date, not the payment due date.
Can I amend a Kansas sales tax return?
To amend a sales tax return in Kansas, use the same type of form initially filed. The amended return must explain the change, identify the amended period, and specify the location involved. Complete all relevant sections and include any supporting documentation.
Kansas sales tax information & contacts
For questions on Kansas sales tax permits, filing returns, or audits, contact:
785-368-8222
There you have it, a comprehensive guide to Kansas' sales tax laws and rules.
