How to Register for a Business Tax License in Kansas
Most businesses starting in Kansas selling a product or offering certain services will need to register for a Business Tax License. This is commonly referred to as a seller’s permit, sales tax license, sales tax number, or sales tax registration.
Check out the rest of this guide to find out who needs a Business Tax License, what products and services are taxable, how to register for a permit, and reporting requirements.
Also See: Guide to Starting a Business in Kansas
Who needs a Business Tax License in Kansas?
A business must register for a Business Tax License in Kansas when:
- A business has sales tax nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Occasionally selling items at craft shows, fairs, seminars, conventions, etc. in Kansas
- Employees (including sales representatives or agents) are working in Kansas
- A business located in Kansas is selling taxable services and products to Kansas residents
- Remote sellers shipping products to Kansas residents.
What products and services are taxable in Kansas?
Physical products
There are a few exceptions, but almost all physical products are taxable when sold at retail in Kansas. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Prescriptions, some medical equipment, and certain manufacturing equipment are tax-exempt.
Digital Products
Digital products, with the exception of canned software (pre-made software), isn’t taxable.
Services
Most services aren’t taxable in Kansas, however, if the service installs, alters, repairs, services or maintains tangible personal property in the state of Kansas, sales tax will be charged. A few examples include:
- Vehicle repair
- Vehicle detailing
- Contractors such as plumbers, painters, and landscapers
- Contractors who pay sales or use tax on their materials and supplies and who work exclusively on residential property generally do not need a sales tax number
- Furniture refinishing
- Sewing and alterations
- Dry cleaning
- Pet grooming
- Admissions to amusement, entertainment, or recreation services
More information about what is taxable is available from the Kansas Department of Revenue.
How to register for a Business Tax License in Kansas
A Business Tax License can be obtained by registering through the Kansas Department of Revenue or by mailing in the CR-16 Form.
Information needed to register includes:
- Type of business entity: Sole Proprietorship, Partnership, Corporation, Limited Liability Company (LLC)
- Business name, mailing address, phone, email
- Names and addresses of owners/officers/members
- Employer Identification Number (EIN) from the IRS, or owner’s Social Security Number if a sole proprietorship with no employees
- Accounting method (Cash or Accrual)
- Description of what products or services are being sold
- North American Industry Classification System (NAICS) code
- Date business activities began or will begin
- Number of locations
- Projected monthly sales tax
- Employee information
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business which is then sent to the Kansas Department of Revenue.
How much is sales tax in Kansas?
The state of Kansas imposes a statewide Retailers’ Sales Tax of 6.5% plus local sales taxes on the:
- Retail sale, rental, or lease of physical goods
- Services to install, apply, repair, service, alter, or maintain goods
- Admission to places that provides entertainment, amusement, or recreation
The sales tax rate that is charged varies depending on the address of the business if the purchase is made or shipped from a business located in the state or where the transaction took place, such as a fair or tradeshow.
In addition to the statewide tax, there are additional local sales taxes that may be added by cities and counties. To find the sales tax for your location, see the sales tax rate locator from the Kansas Department of Revenue.
When are Kansas sales tax returns due?
The Department of Revenue will determine a filing frequency based on the expected volume of annual sales, which will be monthly, quarterly, annually. Generally, a business selling over $3,201 monthly will file monthly.
The due date for filings is the 25th day of the month following the reporting period unless the 25th falls on a weekend or federal holiday, which would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales.
How much does a Business Tax License cost in Kansas?
There is no fee to get a Business Tax License in the state of Kansas.
How long does it take to get a Kansas Business Tax License?
Expect up to 3-4 weeks to receive a Kansas Business Tax License and sales tax registration number.
Do you have to renew a Kansas Business Tax License?
The Business Tax License is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Department of Revenue.
How do I get a wholesale license in Kansas?
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user or final buyer of the item.
Wholesalers and dealers will require a sales tax number and a completed Kansas Resale Exemption Certificate (also referred to as a wholesale license, seller’s permit, or sales tax exemption certificate) to document the items being purchased are for resale.
Is a business license the same thing as a sales tax license?
In addition to registering for a sales tax permit, there may be other business licenses needed before starting a business in Kansas.
If you have questions about the Business Tax License, the Kansas Department of Revenue has a guide to sales taxes in Kansas or can be contacted by calling 785-291-3614.
