It seems like I have driven more miles through Kansas than almost any other state in the United States; everywhere I need to go usually requires a Kansas trek. Don’t ask me why, but I have several clients in Kansas ranging from south central to the western plains as well as in the Topeka, Lawrence and Kansas City areas.
The one good thing, however, is that Kansas highways make it easy to get to where I am going and that’s good because at those times when you are driving on highways and feel like you are the only car on the road, it seems like Kansas is a very big place.
Ranked 15th in size, Kansas forms a rectangle of 82,777 square miles (417 miles west-to-east and 211 miles north-to-south). Population wise, Kansas is ranked 34th in the United States with 2,904,021 individuals, but 40th in terms of density at only 35 people for ever square mile.
Believe me, there are a lot of square miles out in west Kansas that make the density feel more like 35 square miles per person. Known as the ‘Sunflower State’, you can see plenty of the flowers out there in western “no man’s land”, unless of course it is the dead of winter, when you are more likely to see miles upon miles of blowing snow. Of course those vast plains were also once home of the nomadic Native American tribes who hunted those vast herds of buffalo grazing on those sunflowers in the vicinity of Ft. Hayes.
For many a family that would venture west, Kansas was indeed ‘the way west’. Countless wagon trains departed Independence, Missouri and followed the Santa Fe trail, or the trail from Fort Leavenworth to Pikes Peak, Colorado. Today Fort Leavenworth is still home to one of the nation’s largest federal penitentiaries in Leavenworth, Kansas.
Of course what story of Kansas would be complete without some talk of the old cattle drive towns, the most noted of which was Dodge City and home to such old west characters as Wyatt Earp and William Bartholomew “Bat” Masterson.
Even better known than those lawmen of the old west, Kansas' number one and two residents, Dorothy and Toto, were never really residents of Kansas at all. The Wizard of Oz, started life originally titled “From Kansas to Fairyland” when it was first written by L. Frank Baum.
Set among the hard financial times for so many at the turn of the 20th century, one line from the story perhaps best captures the people of Kansas: “No matter how dreary and gray our homes, we people of flesh and blood would rather live there than in any other country, be it ever so beautiful, there is no place like home.” That line may capture the majority of American sentiment as well (it certainly does by my way of thinking.)
Kansas imposes a 6.15 percent state retailers’ sales tax, plus applicable local taxes on the retail sale, rental or lease of tangible personal property along with labor services to install, apply, repair, service, alter, or maintain tangible personal property, and admissions to entertainment, amusement, or recreation places in Kansas. Cities and counties in Kansas may also levy a local sales tax. Each retailer reports and remits the total of the state and local retailers’ sales tax collected to the Kansas Department of Revenue.
When I drive through Kansas I expect to pay Sales Tax every mile along the way, or so it seems. Not only do I pay sales tax when I stop at a road-side convenience store or gas station for a ‘Big Gulp’ and a bag of snacks, but when it comes time to stop for the night, the hotel/motel will also be collecting sales taxes along with other hotel/motel and transient guest taxes depending upon local jurisdictions. Kansas also imposes sales taxes on the rental or lease of vehicles, but also the ‘rental sale’ of automobiles, motorcycles, trailers, trucks and motorized bicycles.
While not formally sales tax, Kansas does have what seems like ‘road tax’, there are a lot of miles of ‘turnpikes’ in Kansas (all the best roads are turnpikes) and so in deed it does seem like you are paying every mile along the way. (Of course I am used to it, because Oklahoma has even more miles of turnpikes.)
About Sales Taxes and this series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. Intuitive Accountant will be publishing "Sales Tax Tuesday" each week during 2015. Since we are publishing these articles in random, rather than alphabetical or geographical order, you will just have to tune-in every Tuesday to see if we are featuring your state.
Sales tax provides critical revenue for states. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Kansas Sales Tax Facts1:
- Sales and Use tax managed by the Kansas Department of Revenue.
- Kansas is a full member of the SST.
- Kansas has 428 different sales tax jurisdictions. The state rate is 6.15% and the total rate can range as high as 9.8% when including local jurisdictions. The average is 8.19% making it the 9th highest average sales tax rate.
- Local taxes can be imposed for a variety of reasons in Kansas including: city, county, county entertainment, health care service funds, public improvement districts, transient guest taxes, and transportation development taxes.
- Sales tax is sourced at the destination address.
- Some common nexus creating activities are: place of business, employees (including independent contractors, agents, or representatives), sales solicitation, delivery, installation, repairs, services, or taking orders.
- Kansas will tax clothing, sports equipment, pre-written software (maintenance contracts associated), food (prepared or otherwise), most drugs and medical related items without a prescription.
- Kansas does not tax custom software (maintenance contracts associated), digital goods, most drugs and medical related items with a prescription.
- Kansas has exemption certificates including but not limited to resale, schools, production, agriculture, railroads, veterinarian, and laundry services.
- When registering with the state everyone must file monthly, and may be put on a less frequent filing schedule based on review by the Kansas Department of Revenue every June.
Kansas DOR Shows ‘School Spirit’ – NOT !2
“At the start of each school year, my children come home with forms to order “spirit wear”–clothes emblazoned with their school’s name. The whole family may (is encouraged to?) order t-shirts, sweatshirts, shorts, sweatpants, etc. Every year, we fill out the forms, write a check to the school PTOs, and look forward the arrival of our new team-spirit clothing.
I confess I have spent very little time wondering whether or not our spirit wear is subject to sales tax. The forms are usually presented to me as I’m preparing breakfast and lunches, before the coffee percolates.” Most people probably think that schools, being ‘tax exempt’ entities of the State, don’t have to charge sales taxes. That’s a bit of an ostrich head in the sand approach.
“Well, it seems some people ponder the taxability of spirit wear with clear minds, after their first ‘cup of joe’. The good people of the Kansas Department of Revenue recently issued a ruling regarding sales by schools. And guess what? Sales of t-shirts to students are taxable in the Sunflower State.”
Who would have ‘thunk it’; next thing you know KDOR will be out to collect sales taxes on admission to the school dramas and sporting events, since the same ‘state code’ specifies sales taxes apply to amusement, entertainment or recreation admissions.
Manual sales and use tax management, even by the local schools trying to sell spirit wear, is prone to error and consumes staff time in pass-through rather than revenue-generating activities. Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting.
Sales tax automation via Avalara allows businesses to be fully sales tax compliant without sacrificing productivity. So if you are a small business, or even a local School Superintendent or Principal needing to collect, track and report sales tax on all those fund raisers, you may want to check out the various sales tax solutions Avalara offers for your state.
1 - State by State Sales Tax - Kansas, Patrick Neu, Avalara; March 16, 2015
2 – Quotations adapted in part from: Exempt Schools Must Collect Tax, Gail Cole, Avalara; October 1, 2014