For the latest news and updates on Kansas state and local tax
February 12, 2024
Kansas Releases Sales and Use Tax Rate Changes Effective April 1, 2024
The Kansas Department of Revenue has released its quarterly Sales and Use Tax update guide. Various city and county rate changes will become effective April 1, 2024. Businesses with obligations to collect and remit Kansas sales and use tax should be aware of these changes for the upcoming quarter and ensure their tax systems are up to date.
November 10, 2023
Kansas Updates Sales and Use Tax Rates Effective January 1, 2024
On October 31, 2023, the Kansas Department of Revenue published Information Guide EDU-96, documenting changes to Kansas’ local sales and use tax rate changes taking effect on January 1, 2024. Businesses that collect Kansas state and local sales and use tax need to update their tax collection systems for the new rates.
May 5, 2023
Kansas Enacts Sales and Use Tax Rate Changes
The State recently enacted state and local sales and use tax rate changes which are effective July 1, 2023. Changes have been made to state tax rates and many local tax rates. Some changes reduce the statutory rate, while others increase the state statutory rate. Businesses that are obligated to collect and remit Kansas sales and use tax need to update their tax systems to account for the various state and local sales tax changes, so they collect the correct amount of tax starting July 1, 2023.
December 9, 2022
Kansas Reduces the Tax Rate on Food and Food Ingredients
The Department of Revenue in Kansas has published notice for the state’s upcoming sales tax rate reduction on food and food ingredients. Currently, the state imposes a sales tax rate of 6.5% on food and food ingredients plus any applicable local taxes. Beginning January 1, 2023, the state will reduce the sales tax rate to 4.0%. On January 1, 2024, the rate will be further reduced to 2.0% and the sales tax will be eliminated on January 1, 2025. Local sales tax rates for food and food ingredients will still apply. The reduction does not apply to prepared foods unless specifically addressed by the State.
May 27, 2022
Kansas Proposal for Businesses Tax Relief Due to COVID-19 Pandemic
A proposal to help certain storefront retail businesses in Kansas affected by the pandemic has been passed by the State legislature and is awaiting signature by Governor Kelly. If Kansas Governor Laura Kelly signs the bill into law, Kansas storefront retail businesses could receive up to $5,000 for 2020 and 2021. For a Kansas business to qualify for this tax relief, they must satisfy the following requirements:
- The business must be for-profit and conduct business at a physical location within the state;
- The business must have been in business as of July 1, 2019, and must have filed a 2019 tax return with at least $10,000 in annual revenue;
- The business must not have previously received more than $150,000 of federal, state, and/or local pandemic-related relief;
- Qualified applicant businesses with a retail storefront that have closed after March 1, 2020 but before January 1, 2021, are eligible for a rebate only for tax year 2020.
February 18, 2022
Kansas Enacts Tax Incentives to Encourage Investment in the State
On February 10, 2022, the governor of Kansas signed Senate Bill 347, which will go into effect starting fiscal year 2022. This is an economic incentive for businesses making substantial capital investments in the state. In order to qualify for the incentives, a business needs to be engaged in specified industries (including advanced manufacturing, aerospace, distribution logistics and transportation, food, and agricultural, professional and technical services) or involve the construction a national corporate headquarters with a minimum capital expenditure of $1 Billion. Incentives for qualified taxpayers include a 0.5% income tax rate reduction, payroll reimbursements, sales tax exemptions on capital purchases, and workforce training credits and reimbursements. If you have questions about whether you may qualify for these new incentives, please contact a Withum SALT practitioner.
January 17, 2022
Kansas Governor Announces Tax Rebate for Working Kansans and No More Sales Tax on Food
During the Condition of the State Address, Governor Kelly announced two taxpayer friendly changes. First, working Kansans, who filed personal income tax returns in 2021, will receive a $250 dollar rebate this year, and married couples filing a joint return will receive a $500 dollar rebate. In addition, the state sales tax on food will be eliminated, effective immediately, once the legislature sends a clean budget bill to the Governor. The budget bill is due on or before January 29th, 2022.
August 13, 2021
Kansas’s Economic Nexus Rules Effective July 1st
Effective July 1, 2021, retailers, out-of-state sellers, and marketplace facilitator’s that have an excess of $100,000 in gross receipts are required to collect and remit sales tax in the state of Kansas. Prior to July 1, 2021, Kansas did not adopt economic nexus provisions however the state took the position that Kansas could require on-line and other remote sellers with no presence in the state to collect and remit applicable sales and use tax delivered into the state of Kansas beginning October 1, 2019.
July 28, 2021
Kansas Issues Guidance on Withholding Taxes for Teleworkers.
Kansas DOR recently issued a notice about L. 2021, S47, which clarified the withholding rules for teleworkers. The notice provides that for January 1, 2021, to December 31, 2022, employers have the option to continue to withhold income taxes based on the state of the employee’s primary work location and not based on the state in which the employee is teleworking or otherwise during the pandemic.
July 8, 2021
Kansas to Exclude Unemployment Compensation from Taxable Income
The Kansas Department of Revenue has advised taxpayers that unemployment compensation should be excluded from gross taxable income in 2020 to align with the federal American Rescue Plan Act of 2021 which excludes up to $10,200 in unemployment compensation from gross income per taxpayer. The IRS is sending refunds to taxpayers affected by the change. In addition to the refunds, the IRS is sending affected taxpayers a letter after making the adjustment notifying the taxpayer of the change. In order for Kansas taxpayers to exclude unemployment compensation from Kansas taxable income, taxpayers must amend their Kansas income tax return and include a copy of the IRS letter. Only affected taxpayers who have filed and paid their Kansas income tax returns by the original due date are required to amend their returns. Kansas taxpayers whose returns are on extension can claim the exclusion for unemployment compensation on their original return.
March 23, 2021
Kansas Update on Extension of Filing Deadline
Indiana Governor Eric Holcomb announced that the Indiana Department of Revenue is extending individual income tax filing and payment deadlines to align with the IRS deadline of May 17, 2021. Individual tax returns and payments, originally due by April 15, 2021, are now due on or before May 17, 2021. All other tax return filings and payment due dates remain unchanged. Individuals unable to file by the May 17, 2021, deadline can file an extension directly with the department or with the IRS. If the IRS extension is granted, the Indiana extension is automatically granted. A timely filed extension results in the federal tax filing deadline of October 15, 2021, and the Indiana filing deadline of November 15, 2021. The extension only shifts the filing deadline and not the payment deadline; 90% of the taxes owed must still be paid by May 17, 2021, to avoid penalties and interest. (DOR Announces Individual and Filing Payment Deadline Extensions, Ind. Dept. Rev., 03/22/2021.)+C17+C18
April 1, 2020
The deadline for 2019 individual income, fiduciary, corporate income and privilege tax has been extended to July 15, 2020. The filing date for homestead and property tax relief refund claims has been extended to October 15, 2020.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.
The State and Local Tax (SALT) laws vary from state to state and are constantly changing. Reach out to Withum’s SALT Team for guidance on how to navigate your state’s local tax laws.