Do You Need to Get a Sales Tax Permit in Kansas?
Quick Answer: You need to get a sales tax permit in the state of Kansas if you have a physical presence, meet economic, affiliate or click-through nexus requirements. Read on for more detailed information.
What is Sales Tax Nexus Anyway?
Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit.
Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, economic presence, or by other factors. Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.
What Should You Do Once You Determine You Have Sales Tax Nexus?
Once you determine that you have sales tax nexus in Kansas, your next step is to register for a sales tax permit in the state. Check out our blog post on getting a sales tax permit in Kansas for more information about that process. If you are not interested in doing the work of getting the permit yourself, TaxValet can handle the permit registration for you with our Sales Tax Permit Registration Service.
Common Ways to Have Sales Tax Nexus in Kansas
1. Economic nexus in Kansas
Economic nexus rules are in a state of flux in Kansas. On August 1, 2019, the state released Notice 19-04 which required ALL retailers who made sales into Kansas to collect, remit and file sales tax, with no minimum sales thresholds. This ruling was to go into effect on October 1, 2019. However, on the same date the policy was to go into effect, the Kansas Attorney General released an opinion on the remote seller policy. The opinion stated that the Kansas Department of Revenue does not have the authority to impose the remote seller policy without a public hearing. The Department of Revenue then issued a statement that they would enforce the policy unless a court ruled against it. Therefore, until there is a court ruling to the contrary, all retailers with sales into Kansas are considered to have economic nexus.
If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.
2. Physical presence in Kansas
The following creates physical presence nexus in Kansas. If you have any of the following in Kansas, you will need to get a sales tax permit:
a. An office or place of business
b. An employee present in the state
c. Goods in a warehouse
d. Retailers selling goods at trade or craft shows and festivals
e. Non-resident contractors performing labor services in the state
For more information about nexus in Kansas, see Publication 1510.
If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.
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Do You Need a Sales Tax Permit in Kansas If You Only Sell on Marketplaces?
Yes, if you are an online retailer who ONLY sells on approved marketplaces (such as Amazon, eBay, etc), you will still need to get a sales tax permit in Kansas. As of this publication, Kansas is not a marketplace collection state and the marketplaces do NOT remit tax on behalf of out-of-state retailers making sales into Kansas.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, check out our Sales Tax Starter Kit service. In fact, if at any point you are stuck and want a team of experts to handle all of this for you, don’t hesitate to contact us.
Uncommon Ways to Have Sales Tax Nexus in Kansas
- Affiliate Nexus in Kansas
What exactly is affiliate nexus? Affiliate nexus can exist when a business has sufficient contact with a state through a separate business. If your out-of-state business has a relationship with an in-state business, then you may have affiliate nexus.
Please keep in mind that an “affiliated business” does not necessarily mean that it is a marketing “affiliate” in the typical sense of the word. Instead, “affiliate nexus” refers to the relationship between two businesses.
Affiliate nexus may be established in Kansas when an out-of-state retailer enters into an agreement with a resident(s) of Kansas under which the resident, for a commission or other consideration, directly or indirectly refers potential customers to the retailer, and cumulative gross receipts from such referrals exceeded $10,000 in the preceding 12 months.
For more information about affiliate nexus, see Kansas Notice 13-05.
2. Click-through Nexus
What is click-through nexus? Referrals from in-state entities may trigger nexus for an out-of-state company with click-through nexus. Out-of-state sellers of tangible personal property or taxable services are presumed to be engaged in business in Kansas if they enter into an agreement with a person in Kansas, a Kansas resident under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or a website, telemarketing, an in-person oral presentation, or otherwise, to the retailer.
To be presumed to be doing business in Kansas, cumulative gross receipts from sales by the retailer must be more than $10,000 during the preceding 12 months. This includes sales to customers in Kansas who are referred to the retailer by all residents with this type of an agreement with the retailer.
For more information about click-through nexus, see Kansas Statute 79-3702.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, check out our Sales Tax Starter Kit service.