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Kansas levies a 6.5 percent sales and use tax rate on tangible personal property and services (retail sales). It also levies other taxes for certain industries and local tax rates – discretionary taxes – for some counties and local jurisdictions. Businesses must charge their customers the proper tax rates and must pay use tax on taxable items they bought tax-free for use in the business.
Types of taxes
Kansas has several taxes in addition to sales and use tax, including jurisdictional tax rates, a transient rental tax, vehicle rental excise, charitable gaming, and more, that a taxpayer must remit.
Sales and use tax
In addition to sales taxes collected on goods and services in Kansas, the state has a use tax that works in conjunction with the sales tax rate. The use tax rate is also 6.5 percent. If a Kansas resident purchases items out of state and the retailer does not charge sales tax or charges less than 6.5 percent plus the local taxes for the buyer’s residence, the buyer must pay the use tax – or the difference in taxes.
For example, a business in Bonner Springs purchases a case of Widget A to use in its shop. The seller does not charge sales tax. The business must pay a 7.5 use tax on the purchase.
Another example is the business buys Widget A to use in its shop. The seller errs and charges its state sales tax of 5 percent. The purchasing business must pay a 2.5 percent use tax: 1.5 percent to the state and 1 percent to the city.
Alaska, Montana, Delaware, New Hampshire, and Oregon do not charge a sales and use tax. Thus, Kansas residents and businesses who purchase items from these states must pay the Kansas use tax.
The use tax return is the same as the sales tax return for sales of goods.
Transient rental tax
Kansas allows counties and local jurisdictions to collect transient rental taxes for hotels, motels, inns, bed and breakfasts, and other businesses that offer rooms to rent. The tax is due on the 25th day of the month after the business collects the taxes. For example, businesses must pay taxes collected in January on or before February 25.
The rate is different for each local jurisdiction. For example, a hotel in Bonner Springs must collect the following:
- Sales tax of 6.5 percent
- Local tax of 1 percent
- Hotel tax of 6 percent
The total tax is 13.5 percent. Thus, a hotel room that costs $100 would have a tax of $13.50 for a total of $113.50.
Taxes on cigarettes are $1.29 plus $0.50 per pack of 20 cigarettes and $1.61 plus $0.62 per pack of 25 cigarettes in addition to the state and local sales taxes. Thus, a pack of 20 cigarettes in Bonner Springs would add 6.5 percent state sales tax, 1 percent city sales tax, plus $1.29 plus $0.50. A $5 pack of cigarettes would then cost:
- 5 times 0.075 (6.5 plus 1 divided by 100) is $0.19 for sales tax for a total of $5.19.
- Add $1.29 and $0.50 to $5.19 for a total of $6.98 for a pack of cigarettes.
Dry cleaning environmental surcharge
Dry cleaners must charge a 2.5 percent dry cleaning environmental surcharge on their gross receipts from dry cleaning or laundering. The charge is on gross receipts and is in addition to state and local sales taxes. Thus, to figure the tax on a $10 dry cleaning bill in Bonner Springs:
- Add the city tax of 1 percent to the state sales tax of 6.5 percent for a total of 7.5 percent.
- Multiply the amount of the sale by 7.5 percent. In this case, 10 times .75 is $0.75, so the gross receipts would be $10.75.
- Multiply 10.75 by .025 to get the dry cleaning environmental surcharge of $0.27. The total due is $11.02.
Liquor drink tax
If a business sells alcoholic drinks, it must charge a 10 percent liquor drink tax. Additionally, the business must have a liquor license, Kansas sales tax number, and post a bond of $1,000 or an average of three months of liquor sales, whichever is greater.
Tire excise tax
A business that sells tires, including a dealership selling new vehicles with new tires, must pay a tire excise tax of $0.25 per tire. The tax does not apply to recaps, used, and retreads.
Vehicle rental excise tax
Businesses that rent or lease motor vehicles must pay a 3.5 percent vehicle rental tax if they rent a vehicle for 28 or fewer consecutive days. The vehicle rental excise tax is in addition to the state and local taxes.
For example, a business in Bonner Springs, Wyandotte County has four taxes:
- State tax of 6.5 percent
- County tax of 1 percent
- City tax of 1.75 percent
- Vehicle rental excise tax of 3.5 percent.
Thus, if the car rental is $100, the business filer must charge a total of 12.75 percent in taxes (100 times .1275 for a tax amount of $12.75). The total the business needs to charge the customer is $112.75.
The due date for the vehicle rental excise tax is the 25th day of the month following the month the business collected the taxes. For example, taxes collected in January are due on or before February 25.
Various counties and cities and other municipalities can charge a sales and use tax in addition to the state’s tax. The amounts vary from state to state. Although Kansas publishes a tax sheet, to get the most current tax rates, a business should rely on the tax lookup for its address.
Additionally, the business should frequently check local taxes as they are apt to change more frequently than the state sales tax.
For example, Bonner Springs has a 1 percent tax, but the county – Wyandotte County – does not have a tax. Thus, residents of Bonner Springs must pay 7.5 percent instead of 6.5 percent.
Registering for and filing Kansas’ taxes
You must file taxes on the following dates:
- If you collect $400 or less during the year, your tax liability payment is due on January 25 of the next year or the next regular workday, if the 25th falls on a weekend or legal holiday.
- If you collect $400.01 to $4,000 per year, you must file quarterly. Your tax due dates are the 25th of the month following the quarter. For example, if you expect to collect over $400.01 in sales and use tax during the year, the taxes you collect from January to March are due on or before April 25.
- If you collect $4,000.01 to $40,000 in sales tax per year, you must file tax returns and remit monthly payments. The tax is due on or before the month after you collected the tax obligation. For example, if you collected $1,200 in January, remit a report for January’s sales and taxes due on or before February 25.
Kansas tax exemptions
Kansas has several exemptions based on the type of organization. The US Government and certain types of nonprofit organizations are exempt. Additionally, the following Kansas entities are exempt from paying sales tax:
- State of Kansas
- School districts in the state
- Groundwater management districts
- Port authorities
Additionally, certain nonprofit medical organizations and water retailers are also exempt.
Calculating Kansas’ sales and use tax rates
To calculate Kansas sales tax, find your business location. Add the local taxes for your jurisdiction (county, city and other municipalities) to the state sales tax. For example, Bonner Springs has a sales tax of 1 percent, but Wyandotte County does not. Thus, you would add 6.5 to 1 for 7.5 percent.
Multiply the tax rate by the sale. For example, if the sale is $100, multiply it by .075 to get $7.50. Then add it to the sale for a total of $107.50.
The state sales tax rate for Kansas is 6.5 percent.
Log into your account at the Kansas Department of Revenue Service Center. Choose the type of exemption that applies to you. Complete the exemption application and submit it through your account.
Yes. For example, if you are a marketplace seller or online retailer and you sell goods to someone in Tennessee, you must collect Tennessee’s sales tax from the Tennessee buyer. You will pay the sales tax to Tennessee. If you do not collect sales tax, the buyer must pay the state’s use tax.
Yes. The Kansas counties can charge up to 1 percent and cities can charge up to 2 percent. Certain counties can exceed the cap, and those exceptions are statutory.
It is up to the business owner to change its own point-of-sale software. It is also the business owner’s responsibility to know when the changes go into effect and implement them immediately.
No. Cities and counties must follow the same tax laws, rules, and regulations that the state follows, including requirements for exemptions.
While many states have a tax holiday for school supplies and clothing, Kansas does not offer a tax holiday.
You must apply for a refund using the forms contained in Publication KS-1510.