Sales (Retailers) Tax
What is sales tax?
Sales tax is a tax paid by an entity for the sales of certain goods and services. The person or entity engaged in the selling side of a purchase transaction is considered a retailer. Sales can be made from a designated location in person, door to door, mail order, by delivery, and even over the internet. State of Kansas law requires the seller to collect funds for the tax from the consumer at the point of sale.
The State of Kansas imposes a nominal percent retailer’s sales tax, plus applicable local taxes (city and county). This combined tax rate is calculated on the:
- Retail sale, rental or lease of tangible personal property;
- Labor services to install, apply, repair, service, alter, or maintain tangible personal property, and
- Admissions to entertain, amusement, or recreation places in Kansas.
What is our responsibility?
Each retailer reports and remits the total of the state and local retailer’s sales tax collected to the Department of Revenue.
If your department/unit/group sales something that you can touch or able to convert to a touchable format or provide services toward an item that can be touched, you must assess and collect sales tax from the customer.
Some exceptions exist to permit the seller to abstain from collecting and remitting Kansas sales tax. These are:
- If the purchasing entity has a tax exemption status registered with the State of Kansas;
- If the tangible property is being sold in conjunction with university research;
- Sales of watercraft, modular homes, manufactured homes or mobile homes; and
- Sales of motor vehicles, trailers, semi-trailers or aircraft that do not qualify as transportation equipment.
Calculating sales tax for locations in the State of Kansas
For the State of Kansas, sales tax is a destination tax. The amount of tax applied to each sale is based on where the goods and services will be received or taken into possession, not based on where they are sold.
Example 1, if an item is sold by a department/unit/group located in Lawrence to a customer residing in Wichita and the goods will be sent to Wichita and received there, the sales tax collected should be based on the sales tax rate for Wichita.
Example 2, if an item is sold by a department/unit/group located in Lawrence and the customer picks up or takes possession of the item in Lawrence, the sales tax collected should be based on the sales tax rate for Lawrence.
Example 3, if an item is sold by a department/unit/group located in Lawrence to a customer residing in Ohio and the goods will be sent to Ohio, since the destination is out-of-state, the department/unit/group would not calculate any sales tax; no Kansas sales tax is due. However, the customer should be informed that they may owe compensating use tax to the state of Ohio for the item purchased.
Sales tax will be applied to the taxable amount of the item being sold.
- (less) Discounts Allowed
+ (plus) Freight and Transportation Charges
= Taxable Amount
x (times) Sales Tax Percentage
= Sales Tax Total
There is an online tool, Kansas Sales and Use Tax Address Tax Rate Locator, for Kansas addresses only on the Kansas Department of Revenue website.
Enter the address, zip code and taxable amount. The online calculator will provide outline of the tax calculation to include the taxable amount, tax and total.
On a quarterly basis, October 1, January 1, April 1 and July 1, the State of Kansas places into effect all changes to state sales tax percentage and local applicable taxes approved. This information may be found on the State of Kansas Department of Revenue website at http://www.ksrevenue.org/salesratechanges.html
Reporting Sales Tax
After your department/unit/group has collected the Kansas sales tax, you must report the amount of sales tax in your departmental deposit in the PeopleSoft Financial System. Use the account code Sales Tax Deposits 264000. You will also need to enter pertinent information as to the location/jurisdiction for which the sales tax was collected and date parameters. Your Service Center Representative will process the necessary documentation and remittance of the sales tax to the State of Kansas as required.
Thank you for being responsible and complying with the State of Kansas sales tax regulations. If you have any questions regarding sales tax or entering your departmental deposit, contact FACC at email@example.com.