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Most businesses starting in Kansas that are 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.
Who needs a Business Tax License in Kansas?
A business must register for a Business Tax License in Kansas when:
- A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
- Occasionally selling items at craft shows, fairs, seminars, conventions, etc in Kansas
- Employees (including sales representatives or agents) are working in Kansas
- An online business located in Kansas is selling taxable products to Kansas residents
What products and services are taxable in Kansas?
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 is tax-exempt.
Digital products, with the exception of canned software (pre-made software), isn’t taxable.
Most services aren’t taxable in Kansas, however if the service installs, alters, repairs, services or maintains tangible personal property, sales tax will be charged. A few examples include:
- Vehicle repair
- Vehicle detailing
- Plumbing, painting, landscaping
- 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
Information needed to register includes:
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Business name, mailing address, phone, email
- Names and addresses of owners/officers/members
- Federal Employer Identification Number (FEIN), or SSN 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
How much does a Business Tax License cost in Kansas?
There is no cost for a Business Tax License in 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.
Do you have to renew your 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.
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the Kansas Department of Revenue.
How much sales tax is charged?
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.
Filings are due the 25th day of the month following the reporting period, unless the 25th falls on a weekend or federal holiday, in which case 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 occurred.
Sales tax on purchases for resale
A business is able to 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 of the item.
Wholesalers and distributors will require a sales tax number, and in many cases require the reseller to fill out the Resale Certificate (Form ST-28A) to document the items being purchased are for resale.
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.