Kansas Sales Tax “Toughest in the Nation”

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By Brooke Kuntz

 

Recently, the Kansas Department of Revenue (KDOR) issued a notice that provides guidance to remote sellers doing business in Kansas. This notice requires online sellers with no physical presence in Kansas to collect and remit the applicable sales and use tax on sales delivered into Kansas. So far, no other state has taken the same position as the KDOR.

 

Remote sellers are to begin collecting and remitting Kansas sales and/or use tax by October 1, 2019.

 

Before this date, the KDOR will not enforce the statutory requirements to collect and remit on these remote sellers for sales made in Kansas.   The notice requires sellers not already registered in Kansas to obtain a sales and/or use tax account number.

 

Currently, the KDOR does not specify any level of de minimis sales before the collection and remittance of sales tax is triggered.  The definition of de minimis is “lacking significance or importance: so minor as to merit disregard.”  This means that generally all sellers – regardless of how much they are selling into Kansas – will be required to collect and remit Kansas sales and/or use tax.

 

During the 2019 session of the Kansas legislature, a major tax bill contained de minimis requirements, but Governor Laura Kelly vetoed the bill and the Kansas House failed to override the veto. The lack of a de minimis threshold in the current Kansas Statute is likely to be challenged.

 

Policies continue to shift following the South Dakota v. Wayfair, Inc. landmark U.S. Supreme Court decision.

 

This decision gives states the right to collect tax on purchases made from sellers in different states, regardless of whether the business has a physical presence in the taxing state.  As always, please contact your ABBB advisor for questions or more information.