Changes to Kansas Sales Tax Legislation: July 2021

Kansas Sales Tax Legislation, July 2021

Many remote sellers and marketplace facilitators will have to start collecting Kansas sales tax beginning July 1, 2021.

Senate Bill 50 was originally vetoed by the Governor for reasons unrelated to the Wayfair provisions, but the Kansas legislature recently voted to override the veto.

Sales Tax Changes for Remote Sellers

A seller with no physical presence in the state will have to start collecting tax on sales into Kansas if they have more than $100,000 in “cumulative gross receipts” from sales into Kansas in the current or immediately preceding calendar year.

Once the threshold is passed for the current year, the collection obligation is triggered immediately.

Remote sellers will want to carefully monitor their sales so they know when the obligation begins. Moreover, Kansas is a Streamlined Sales Tax member state so the auditing and liability protections granted to retailers using Certified Service Providers, like TaxCloud, are fully available.

Updates to Marketplace Facilitators Tax Collection

Marketplace facilitators are subject to the same tax collection obligation if their sales “of property or services subject to tax,” both on their own account and on behalf of their marketplace sellers, exceed the $100,000 threshold. Marketplace facilitators dealing in short-term rental properties are specifically included.

Somewhat unusually, if the Kansas Department of Revenue is satisfied that “substantially all” of a facilitator’s sellers are already collecting the tax, it may waive the facilitator’s collection obligation.

Need help managing your sales tax obligations? Get in touch here.