Changes to Sales Tax Laws for Kansas Retailers
Oct 18, 2022
New legislation on sales taxes affecting Kansas retailers has begun rolling out. Below is a summary of the various changes in House Bills 2136 and 2106.
Estimated Sales Tax Remittance Requirements
- Effective date: July 1, 2022
- Summary: The changes eliminate the requirement for retailers with total annual tax liabilities over $40,000 to submit an estimated payment covering the first 15 days of the current month when filing a prior month’s sales tax return.
- Effective date: Jan. 1, 2024
- Summary: In addition to the change in remittance requirements, this law also makes minor adjustments to filing thresholds. After Dec. 31, 2023, the new thresholds will be:
- $1,000 for annual returns
- $5,000 for quarterly returns
- $5,000 for monthly returns
Shipping and Handling Charges
- Effective date: July 1, 2023
- Summary: This law exempts sales taxes on shipping and handling charges that are listed separately on billing documents such as invoices, bills of sale, or similar records given to purchasers. The exemption does not apply to delivery charges for direct mail or other instances where the shipped items are not billed directly to the recipients.
Food and Food Ingredients
- Effective date: Phased beginning Jan. 1, 2023
- Summary: Over the next few years, sales and compensating use tax on food and food ingredients will be phased out and the food tax credit will be discontinued. Qualifying items have been expanded to include bottled water, candy, dietary supplements, food sold through vending machines, and soft drinks. The exemption does not apply to certain prepared foods, alcoholic beverages, or tobacco. The phases are:
- 2022 rate: 6.5%
- Jan. 1, 2023: Reduced to 4%
- Jan. 1, 2024: Reduced to 2%
- Jan. 1, 2025: Eliminated
If you have any questions about how these laws may affect your business, please contact us.