Due to the surge in online sales in recent years, several companies are debating the necessity of collecting sales tax in Kansas. The short answer is that, like other jurisdictions, Kansas normally taxes online sales. There are several intricacies and exceptions to take into account, though. Does Kansas require me to collect sales tax?
purchases tax must be collected on all purchases made in Kansas, including those made online, if your company has a physical location there, such as a shop, warehouse, or office. The term “nexus” in the state is used to describe this. If you do a particular number of sales or transactions in Kansas even though you don’t have a physical presence there, you can still be obligated to collect sales tax. An economic nexus is what this is known as.
As of October 1, 2019, Kansas will compel out-of-state merchants who completed 200 or more independent transactions or more than $100,000 in sales in the state during the current or previous calendar year to collect and remit sales tax. Both offline and internet sales are affected by this. Does Kansas Collect Sales Tax on Purchases Made Outside the State?
You can still be obligated to pay sales tax if you live in Kansas and buy products or services from an out-of-state vendor who doesn’t have a physical presence there. The purpose of this use tax is to guarantee that Kansas residents pay the same amount of tax whether they buy items within the state or outside of it.
In Kansas, the use tax rate is equal to the current sales tax rate of 6.5%. However, because the use tax is self-assessed, each person is in charge of filing and paying the tax independently. Who in Kansas is exempt from paying taxes?
– Nonprofit organizations: In Kansas, purchases made by eligible nonprofit organizations are not subject to sales tax. At the time of purchase, the company must, nevertheless, present a legitimate exemption certificate.
– Government entities: In Kansas, purchases made by federal, state, and municipal governments are not subject to sales tax. However, while making a purchase, the entity must present a legitimate exemption certificate.
– Specific products: In Kansas, several goods, including food, prescription medicines, and agricultural supplies, are free from sales tax.
There are a few ways to avoid collecting sales tax in Kansas if you don’t want to have a physical presence or an economic nexus there. These consist of: Limiting your sales to consumers outside of Kansas
– Using a third-party fulfillment provider to manage your inventory and shipment
– Absence from Kansas trade fairs or events
– Absence from Kansas advertising or business solicitation
In conclusion, businesses should be aware of their sales tax responsibilities in Kansas as internet purchases are typically subject to taxation there. There are, however, exclusions and methods that can lower a company’s tax obligation. To ensure adherence to state and local tax rules, it is always a good idea to contact with a tax expert.