Kansas — Sales & Use Tax

Kansas imposes a 6.5% state sales tax on the privilege of engaging in the business of selling tangible personal property at retail in Kansas or rendering or furnishing any of the services taxable under the Kansas retailers' sales tax act. A "retail sale" means any sale, lease, or rental for any purpose other than for resale, sublease, or subrent. "Retailer" means a seller regularly engaged in the business of selling, leasing, or renting tangible personal property at retail or furnishing electrical energy, gas, water, services, or entertainment, and selling only to the user or consumer and not for resale.

Taxable services are only those specifically enumerated in K.S.A. 79-3603 and include: labor services to install, apply, repair, service, alter, or maintain tangible personal property; admissions to places providing amusement, entertainment, or recreation services; telecommunications services; and fees for participation in sports, games, and other recreational activities (subject to statutory exemptions). Professional services are generally not subject to Kansas sales tax.

The tax is paid by the consumer or user to the retailer, and each retailer must collect from the consumer the full amount of the tax imposed.

Source: K.S.A. 79-3603, K.S.A. 79-3602, K.S.A. 79-3604

A remote seller without physical presence in Kansas must register and collect sales tax if the seller had cumulative gross receipts exceeding $100,000 from sales to Kansas customers during the current or immediately preceding calendar year. The threshold includes all sales to Kansas customers, regardless of whether the items sold are taxable or exempt. Effective July 1, 2021, a remote seller exceeding the threshold for the first time in the current calendar year is not required to collect tax on the first $100,000 of sales in that year, but must collect on all sales exceeding that amount.

Source: K.S.A. 79-3702(h)(1)(G); Kansas Department of Revenue Notice 21-17

Kansas imposes a state sales tax at the rate of 6.5% on retail sales of tangible personal property and taxable services. The 6.5% rate has been in effect since July 1, 2015. As of January 1, 2025, the state sales tax rate on food and food ingredients is 0%, though local sales taxes on food remain in effect.

Source: K.S.A. 79-3603; Kansas Department of Revenue FAQ

Kansas cities and counties may impose local retailers' sales taxes in addition to the 6.5% state rate. City sales taxes are fixed in increments of 0.05% and may not exceed 2% for general purposes; cities may impose an additional tax of up to 1% for specified special purposes, which expires after 10 years. County sales taxes are fixed in increments of 0.25% and generally may not exceed 1%, though many counties have statutory authority to exceed this cap for designated purposes. Local sales taxes mirror state exemptions and are administered and collected by the Kansas Department of Revenue.

Source: K.S.A. 12-189

Effective July 1, 2021, a marketplace facilitator must collect and remit Kansas sales tax if it makes or facilitates sales of property or services subject to tax for delivery into Kansas exceeding $100,000 during the current or immediately preceding calendar year. For a marketplace facilitator that exceeds the threshold for the first time in the current calendar year, the collection obligation applies only to sales in excess of $100,000 in that year. A marketplace facilitator is defined as a person that contracts with sellers to facilitate sales through a marketplace and collects payment from purchasers.

Source: K.S.A. 79-5602

Kansas law prohibits any person from engaging in the business of selling tangible personal property at retail or furnishing taxable services without first obtaining a registration certificate from the Director of Taxation. This requirement applies regardless of whether the seller has physical presence in Kansas; remote sellers meeting the economic nexus threshold of $100,000 in cumulative gross receipts (discussed in a separate section) must also register.

Application process and content

An applicant must submit an application on forms furnished by the Director stating: (1) the name of the applicant; (2) the address or addresses at which the applicant proposes to engage in business; and (3) the character of the business. The taxpayer may be registered by an agent, provided the appointment is in writing and submitted to the Director. Utilities taxable under the Kansas Retailers' Sales Tax Act are not required to register but must comply with all other provisions of the act.

Pre-registration tax liability

The Director will issue a registration certificate unless the applicant owes any sales tax, penalty, or interest at the time of application. If any such amounts are owed, the Director must require the applicant to pay the amount owed before issuing the certificate.

Separate certificates per location

Kansas requires a separate registration certificate for each place of business. Each certificate must be conspicuously displayed at the location for which it was issued.

Streamlined Sales Tax Agreement sellers

A seller registering under the Streamlined Sales and Use Tax Agreement is considered registered in Kansas and is not required to pay any registration fees or other charges to register in the state if the seller has no legal requirement to register. A written signature from the seller registering under the agreement is not required.

Prohibition on operating without certificate

It is unlawful to engage in the business of selling tangible personal property at retail or furnishing taxable services in Kansas without a valid registration certificate. It is also unlawful to engage in such business after a registration certificate has been suspended or revoked. A suspended or revoked registration certificate will not be reinstated until all outstanding tax, penalty, and interest liabilities are satisfied.

Source: K.S.A. 79-3608

Kansas assigns sales and use tax filing frequencies based on the amount of tax liability a retailer incurred during the preceding calendar year. The Kansas Department of Revenue reviews the reporting history of each registered taxpayer annually and assigns a filing frequency—annual, quarterly, or monthly—to ensure compliance with statutory guidelines. A notice of proposed filing frequency changes is mailed to affected taxpayers prior to January 1, and any changes take effect on January 1 of the upcoming year.

Filing frequency thresholds (effective January 1, 2018)

Kansas law prescribes the following filing frequency assignments based on annual tax liability during the preceding calendar year:

• Annual filers: Taxpayers with annual tax liability of less than $400. Returns are due on or before January 25 of the following year.
• Quarterly filers: Taxpayers with annual tax liability of $400 or more but less than $4,000. Returns are due on or before the 25th day of the month following the end of each calendar quarter (April 25, July 25, October 25, and January 25).
• Monthly filers: Taxpayers with annual tax liability of $4,000 or more. Returns are due on or before the 25th day of the month immediately following the tax period.

For taxpayers with no previous filing history, the Department assigns filing frequency based on estimated tax liability. The Department is authorized to modify a taxpayer's filing schedule when the current schedule is inaccurate.

Special rules

Seasonal businesses file monthly during the period of business operation. Sellers registered under the Streamlined Sales and Use Tax Agreement without a legal requirement to register in Kansas may follow alternative filing schedules as permitted under the Agreement.

Electronic filing requirement

Kansas law requires businesses to submit sales, compensating use, and withholding tax returns electronically. The Department offers several electronic file-and-pay solutions.

Zero returns

Taxpayers must file a return for each reporting period, even when reporting zero tax liability. Failure to file a required return, including a zero return, may result in penalties.

Due date falling on weekend or holiday

When a return due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day.

Source: K.S.A. 79-3607; Kansas Department of Revenue, Frequently Asked Questions Filing Frequency Changes; Kansas Department of Revenue, Frequently Asked Questions About Sales

Kansas imposes a compensating use tax on "every person in this state" for the privilege of using, storing, or consuming within Kansas any article of tangible personal property. The tax is levied and collected in an amount equal to the consideration paid by the taxpayer multiplied by 6.5%, the same rate as the state sales tax. The compensating use tax compensates for the lack of sales tax paid at the time of purchase and applies when tangible personal property is purchased from out-of-state (or in-state without tax collected) and subsequently used, stored, or consumed in Kansas.

Scope and trigger

All property purchased or leased within or without Kansas and subsequently used, stored, or consumed in Kansas is subject to the compensating tax if the same property or transaction would have been subject to the Kansas retailers' sales tax had the transaction been wholly within the state. This statutory rule means that any item that would be taxable if purchased in a Kansas retail transaction triggers use tax liability when purchased elsewhere and brought into or used in Kansas without Kansas sales tax having been paid.

Use, storage, and consumption defined

K.S.A. 79-3702(c) defines "use" as the exercise within Kansas by any person of any right or power over tangible personal property incident to the ownership of that property, except processing or sale in the regular course of business. "Storage" is defined as any keeping or retaining in Kansas for any purpose except sale in the regular course of business or subsequent use solely outside Kansas. The statute does not impose compensating tax on property kept in Kansas solely for the purpose of subsequently transporting it outside the state for use thereafter solely outside the state, or for processing into other tangible personal property to be transported outside Kansas and used solely outside the state.

Consumer self-assessment obligation

Individual consumers who purchase tangible personal property from out-of-state retailers for use, storage, or consumption in Kansas owe compensating use tax when no Kansas sales tax was collected at the time of purchase. The Kansas Department of Revenue advises that compensating use tax is "a tax paid on merchandise purchased from other states and used, stored, or consumed in Kansas on which no sales tax was paid," and that it is also due if the other state's rate is less than the Kansas rate of 6.5%. The tax is based on the total cost of the goods purchased, including postage, shipping, handling, or transportation charges. Use tax is due whether the property is shipped into Kansas or picked up in another state and brought back to Kansas. Consumers report and remit use tax directly to the Kansas Department of Revenue. Use tax applies only to tangible personal property; labor services are not subject to use tax.

Business purchaser obligations

Businesses that purchase tangible personal property for use in Kansas (rather than for resale) owe compensating use tax if Kansas tax was not collected by the seller. The Department of Revenue notes that a marketplace facilitator located outside Kansas (with economic nexus) collects and remits Kansas retailers' compensating use tax, while a marketplace facilitator located in Kansas collects sales tax. Businesses registered for Kansas sales tax purposes generally report and remit use tax on their sales and compensating use tax returns.

Retailer collection vs. purchaser self-assessment

When an out-of-state retailer has nexus with Kansas and collects Kansas compensating use tax from the purchaser, the purchaser's self-assessment obligation is satisfied. When the retailer does not collect Kansas tax, the purchaser remains responsible for self-assessing and remitting the tax. The Kansas Compensating Tax Act incorporates the enforcement, collection, and administration provisions of the Kansas Retailers' Sales Tax Act (K.S.A. 79-3601 through 79-3625, 79-3650, 79-3693, and 79-3694) insofar as practicable.

Measuring the tax base

K.S.A. 79-3702(a) defines "purchase price" for compensating use tax purposes as the consideration paid or given or contracted to be paid or given by any person to the seller for the article purchased. The term includes the actual cost of transportation from the place where the article was purchased to the person using it in Kansas. If a cash discount is allowed and taken on the sale, the discount is deducted in arriving at the purchase price.

Source: K.S.A. 79-3703; K.S.A. 79-3702; Kansas Department of Revenue, Consumers' Compensating Use Tax

Kansas employs destination-based sourcing to determine which state and local tax rates apply to a retail sale of tangible personal property or taxable services. Under this system, the combined state and local sales tax rate is determined by the location where the customer receives the product or first uses the service, not the seller's location.

General sourcing hierarchy for retail sales

K.S.A. 79-3670(a) establishes a cascading sourcing hierarchy that applies to retail sales (excluding leases and rentals) of tangible personal property and taxable services:

1. Over-the-counter sales: When the product is received by the purchaser at a business location of the seller, the sale is sourced to that business location.

1. Shipped or delivered sales: When the product is not received by the purchaser at the seller's business location, the sale is sourced to the location where receipt by the purchaser (or the purchaser's donee designated by the purchaser) occurs, including the location indicated by delivery instructions known to the seller.

1. Seller's business records: When subsections (1) and (2) do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller maintained in the ordinary course of business, when use of this address does not constitute bad faith.

1. Payment instrument address: When subsections (1), (2), and (3) do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of the purchaser's payment instrument, if no other address is available.

1. Seller's location as default: When subsections (1) through (4) do not apply, the sale is sourced to the location from which the product was shipped.

Practical application

For remote sales shipped to Kansas customers, a seller applies the combined state and local tax rate in effect at the Kansas ship-to address. This means a remote seller with no physical presence in Kansas but with economic nexus must charge tax at the destination rate, not at the seller's out-of-state location rate.

For in-person over-the-counter sales where the customer takes immediate possession at the seller's location, the seller applies the tax rate in effect at that business location.

The Kansas Department of Revenue confirms that "the combined tax rate that is charged is based on the destination of the goods or service. In other words, the rate in effect where the customer takes delivery of the merchandise or makes first use of a taxable service."

Application to services

Destination-based sourcing applies to all retail sales of taxable services as well as sales of tangible personal property. For services, the location where the purchaser receives or first uses the service determines the applicable rate. Before July 1, 2003, certain service contracts over $10,000 were sourced to the location where services were performed; since that date, all taxable services are sourced under the destination-based hierarchy.

Exceptions to destination-based sourcing

Several categories of sales are not sourced under K.S.A. 79-3670 and instead follow origin-based sourcing or special rules:

• Watercraft, modular homes, manufactured homes, and mobile homes: Sourced to the place of business of the retailer under K.S.A. 12-191.

• Motor vehicles, trailers, semi-trailers, and aircraft (excluding transportation equipment as defined in K.S.A. 79-3670(d)): Retail sales (excluding leases/rentals) are sourced to the place of business of the retailer under K.S.A. 12-191.

• Telecommunications services: Sourced under separate rules set forth in K.S.A. 79-3673, generally to the customer's place of primary use or service address.

Effective date

Kansas adopted destination-based sourcing rules effective July 1, 2003, as part of its compliance with the Streamlined Sales and Use Tax Agreement. These rules replaced the prior origin-based system that generally sourced sales to the seller's location.

Source: K.S.A. 79-3670; K.S.A. 79-3669; K.S.A. 12-191; Kansas Department of Revenue, Destination-Based Sourcing Rules; Kansas Department of Revenue, Pub. KS-1510

Kansas law presumes all sales of tangible personal property and enumerated services are subject to tax until the contrary is established. The burden of proving a sale is not subject to tax rests on the seller unless the seller obtains a valid exemption certificate from the purchaser.

Acceptance and relief from liability

An exemption certificate relieves the seller from collecting and remitting tax if the seller obtains the required identifying information from the purchaser and the reason for claiming the exemption at the time of purchase, and maintains proper records of exempt transactions. A seller may obtain a fully completed exemption certificate or capture the relevant data elements within 90 days after the sale. If the seller has not obtained an exemption certificate or all relevant data elements, the seller has 120 days after a request for substantiation by the Director of Taxation to obtain a fully completed certificate from the purchaser (taken in good faith) or other information establishing that the transaction was not subject to tax.

Required elements of an exemption certificate

All exemption certificates must include: (1) the name of the seller; (2) the name and address of the purchaser; (3) a description of the item(s) purchased or the types of property resold in the purchaser's normal course of business; (4) the reason the purchase is exempt; and (5) a signature (if a paper certificate is used). A purchaser is not required to provide a signature to claim an exemption unless a paper exemption certificate is used.

Blanket certificates and recurring business relationships

Kansas law provides that a seller is relieved of liability for tax when the seller obtains a blanket exemption certificate from a purchaser with which the seller has a "recurring business relationship." Such certificate need not be renewed or updated when there is a recurring business relationship between the buyer and seller. A recurring business relationship exists when a period of no more than 12 months elapses between sales. All exemption certificates authorized by Kansas law may be used as blanket certificates.

Retention period

Retailers must keep all sales tax records, including exemption certificates, for at least three years from the last day of the calendar year or fiscal year of the retailer, whichever comes later, to which the records pertain. Such books, records, and other papers and documents must be available for inspection by the Director or the Director's authorized agents during business hours.

Common exemption categories

Kansas recognizes numerous exemption categories under K.S.A. 79-3606, including:

• Resale: Registered retailers purchasing tangible personal property for resale (not for their own use) may present a resale exemption certificate (Form ST-28A or PR-78SSTA). To lawfully present a resale certificate, the purchaser must be engaged in the business of selling property or services of the same kind purchased, hold a registration certificate (except for permitted drop-shipment sales), and at the time of purchase either intend to resell the property in the regular course of business or be unable to ascertain whether the property will be resold or used for some other purpose. A resale certificate may be used for resale of services to tangible personal property and not for services to real property.

• Manufacturing and processing: Kansas exempts tangible personal property consumed in production (K.S.A. 79-3606(n)), tangible personal property that becomes an ingredient or component part of tangible personal property produced for ultimate retail sale (K.S.A. 79-3606(m)), and integrated production machinery and equipment (K.S.A. 79-3606(kk)). Manufacturers that do not make retail sales may obtain a manufacturer's or processor's sales tax exemption number from the Kansas Department of Revenue to use in conjunction with the Consumed in Production Exemption Certificate (ST-28C), Ingredient or Component Part Exemption Certificate (ST-28D), or Integrated Production Machinery and Equipment Exemption Certificate (ST-201).

• Agriculture: Kansas provides numerous agricultural exemptions, including sales of animals, fowl, and aquatic plants and animals primarily used in agriculture or aquaculture (K.S.A. 79-3606(o)); farm machinery and equipment used exclusively in farming, ranching, or aquaculture production (K.S.A. 79-3606(t)); propane for agricultural use (K.S.A. 79-3606(w)); and seeds, tree seedlings, fertilizers, insecticides, herbicides, and services purchased for the purpose of producing plants to prevent soil erosion on land devoted to agricultural use (K.S.A. 79-3606(mm)). Purchasers use the Agricultural Exemption Certificate (ST-28F) to claim these exemptions.

• Tax-exempt entities: Certain entities are exempt from Kansas sales tax based on their status, including governmental entities, educational institutions, nonprofit hospitals, and specific nonprofit organizations listed in K.S.A. 79-3606. These entities must apply for and obtain a numbered Tax-Exempt Entity Exemption Certificate from the Kansas Department of Revenue. The certificate must bear the name, address, and identification number of the entity, and be signed by an authorized person. Tax-Exempt Entity Exemption Certificates contain an expiration date; expired certificates are not valid for claiming exemptions.

Penalties for misuse

Any person who issues a resale certificate or other exemption certificate to unlawfully avoid payment of tax for business or personal gain is guilty of a misdemeanor punishable by a fine of not more than $1,000 or imprisonment for not more than one year, or both. If the Director determines that a person issued a resale certificate to unlawfully avoid payment of tax, the Director must increase any penalty due under K.S.A. 79-3615 by $250 or 10 times the tax due, whichever is greater, on each transaction where the misuse occurred.

Source: K.S.A. 79-3651; K.S.A. 79-3609; K.S.A. 79-3606; Kansas Department of Revenue Publication KS-1520