Kansas Sales Tax 2024 Overview

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Kansas Sales Tax Updates - 2024
CHANGES, CALCULATIONS, AND COMPLIANCE
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Introduction
Introduction to Kansas Sales Tax (2024)

• Welcome to our detailed guide on Kansas Sales Tax
  for 2024!
• Today, well be covering key changes, updates,
  and essential information for businesses and
  individuals alike.
• This presentation will break down Kansas state
  and local sales tax adjustments, along with
  guidelines for compliance.

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Kansas Sales Tax Rates (2023 vs. 2024)
Lets start with the comparison between 2023 and
2024 sales tax rates in Kansas.

• In 2023, the state-level sales tax stood at 6.5.
  Local municipalities could add between 1.0 to
  4.0 in local taxes, creating a combined rate
  ranging from 7.5 to 10.5.
• In 2024, the state sales tax has been slightly
  reduced to 6.35, with local rates staying the
  same (1.0 to 4.0). As a result, the total
  combined sales tax range is now 7.35 to 10.35.

Key takeaway

• State-level tax decreased slightly by 0.15,
  lowering the overall combined tax rate range.

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Breakdown of Kansas Sales Tax Calculation
To calculate Kansas sales tax, businesses should
follow these steps

• Determine the Taxable Amount Add the sale price
  and shipping charges (if applicable).
• State Sales Tax Rate Multiply the taxable amount
  by 6.35 (for 2024).
• Local Sales Tax Rate Multiply by the specific
  local tax rate for your location.
• Total Sales Tax Add the state and local taxes
  together.

Lets also consider some important categories for
sales tax calculations

• E-commerce For remote sellers exceeding 100,000
  in sales in Kansas, sales tax must be collected.
• SaaS Software as a Service (SaaS) is taxable in
  Kansas at the combined state and local rate.
• Services Most services are exempt from tax
  unless otherwise specified.

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Understanding Use Tax
What is Use Tax?

• Applies to out-of-state purchases used in Kansas
• State Use Tax Rate 6.5
• Compliance Businesses file monthly, quarterly,
  or annually

Use tax applies to

• Tangible personal property
• Digital goods
• Taxable services

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Recent Changes to Kansas Sales Tax (2024)
In 2024, Kansas introduced several updates to its
sales tax system

• State Sales Tax Decrease The general state sales
  tax rate was reduced from 6.5 to 6.3.
• Sales Tax on Groceries From July 1, 2024, the
  tax on groceries is reduced to 4, down from the
  general rate of 6.5.
• Digital Goods The sales tax on digital services,
  like streaming, remains at 6.3.
• Taxation of Professional Services From March
  2024, a 6.3 sales tax will apply to certain
  professional services that were previously
  exempt.
• Elimination of Exemption on Data Services As of
  September 1, 2024, data processing and
  information services no longer enjoy a lower tax
  rate and will be taxed at the full 6.3 rate.

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Excise Taxes and Other Sales Tax Considerations
Kansas also applies excise taxes to certain goods

• Alcoholic Beverages Specific rates for beer,
  wine, and spirits.
• Tobacco Per-pack tax on cigarettes and
  percentage tax on other tobacco products.
• Motor Fuels Gasoline and diesel are taxed at the
  wholesale level but are passed on to consumers.

Discretionary Taxes

• Transient Guest Tax Applied to accommodation
  charges by transient guests in specific areas.
• Special District Taxes Some regions may have
  special taxes for specific purposes (e.g.,
  community development).

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Nexus in Kansas (2024)
Physical Nexus
Economic Nexus

• In 2024, Kansas has expanded physical nexus
  standards, requiring businesses to register if
  they have a physical presence such as owning
  property, having employees, or storing inventory
  in the state.
• This also includes temporary presences like trade
  shows or events

• Out-of-state sellers must collect sales tax if
  their annual sales exceed 100,000 in Kansas.
• Marketplace facilitators (like Amazon) are also
  responsible for collecting and remitting sales
  tax for third-party sellers exceeding this
  threshold.

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Affiliate Nexus and Marketplace Facilitators
Affiliate Nexus
If businesses have affiliates in Kansas (such as
marketing affiliates), they may be required to
collect and remit sales tax even if they dont
have a direct physical presence.
Marketplace Facilitators
If a marketplace facilitator exceeds 100,000 in
sales, they must collect and remit sales tax on
behalf of third-party sellers.
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Compliance, Reporting, and Penalties
To stay compliant with Kansas sales tax laws,
businesses must

• Register with the Kansas Department of Revenue if
  required (based on nexus or sales thresholds).
• File Sales Tax Returns Depending on sales
  volume, returns may be due monthly, quarterly, or
  annually.
• Pay Taxes Promptly Failure to remit sales tax
  accurately and on time can result in penalties
  and interest.

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Thank You