Several registrations must be completed when starting a business in Kansas. The most common is the Kansas Business Tax License, sometimes called a retailer certificate, seller’s permit, sales tax permit, sales and use tax number, or sales tax registration.
Keep reading to learn who needs a Kansas Business Tax License, what kinds of products and services are taxable, how to register, and what you need to do for reporting.
Related: Kansas Startup Checklist
Who needs a Business Tax License in Kansas?
A business must register for a Business Tax License in Kansas when:
- A business has a sales tax nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Occasionally selling items at craft shows, fairs, seminars, conventions, etc., in Kansas.
- Hiring Kansas employees (including remote employees, sales representatives, or agents)
- A business in Kansas is selling taxable services and products to Kansas residents.
- Remote sellers shipping products to Kansas residents.
What products and services are taxable in Kansas?
Physical Products
There are a few exceptions, but almost all physical products are taxable when sold at retail in Kansas. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Prescriptions, some medical equipment, and certain manufacturing equipment are tax-exempt.
Digital Products
Digital products, except for canned software (pre-made software), aren’t taxable.
Services
Most services aren’t taxable in Kansas, however, if the service installs, alters, repairs, services or maintains tangible personal property in the state of Kansas, sales tax will be charged. A few examples include:
- Vehicle repair
- Vehicle detailing
- Generally, contractors such as plumbers, painters, and landscapers have taxable services, but contractors who pay sales or use tax on their materials and supplies and who work exclusively on residential property are not taxable.
- Furniture refinishing
- Sewing and alterations
- Dry cleaning
- Pet grooming
- Admissions to amusement, entertainment, or recreation services
More information about what is taxable in Kansas is available from the Kansas Department of Revenue.
How to register for a Business Tax License in Kansas
A Kansas Business Tax License can be obtained by registering through the Kansas Department of Revenue or mailing the CR-16 Form.
Information needed to register includes:
- Type of business entity: sole proprietorship, general partnership, corporation, Limited Liability Company (LLC)
- Business name, mailing address, phone, email
- Names and addresses of owners/officers/members
- Employer Identification Number (EIN) from the IRS or owner’s Social Security Number if a sole proprietorship with no employees
- Accounting method (Cash or Accrual)
- Description of what products or services are being sold
- North American Industry Classification System (NAICS) code
- Date business activities began or will begin
- Number of locations
- Projected monthly sales tax
- Employee information
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, it charges the appropriate sales tax rate to the customer. The business collects this tax, which it then sends to the Kansas Department of Revenue.
How much is sales tax in Kansas?
The state of Kansas imposes a statewide Retailers’ Sales Tax of 6.5% plus local sales taxes on the:
- Retail sale, rental, or lease of physical goods
- Services to install, apply, repair, service, alter, or maintain goods
- Admission to places that provide entertainment, amusement, or recreation
The sales tax rate charged varies depending on the business address, whether the purchase is made or shipped from a business in the state, or where the transaction occurred, such as at a fair or tradeshow.
In addition to the statewide tax, cities and counties may add local sales taxes. To find the sales tax for your location, see the Kansas Department of Revenue’s sales tax rate locator.
When are Kansas sales tax returns due?
The Department of Revenue will determine a filing frequency based on the expected volume of annual sales, which will be monthly, quarterly, and annually. Generally, a business selling over $3,201 monthly will file monthly.
The due date for filings is the 25th day of the month following the reporting period unless the 25th falls on a weekend or federal holiday, which would move to the next business day.
A filing indicating no sales is still required even if the business had no sales during the reporting period.
Kansas Business Tax License FAQs
How much does a Business Tax License cost in Kansas?
There is no fee to get a Business Tax License in the state of Kansas.
How long does it take to get a Kansas Business Tax License?
Expect up to 3-4 weeks to receive a Kansas Business Tax License and sales tax registration number.
Do you have to renew a Kansas Business Tax License?
The Business Tax License is a one-time registration, and no renewals are needed. However, if any information about the business changes, such as the mailing address, additional locations, or change in ownership, it must be updated with the Department of Revenue.
How do I get a wholesale license in Kansas?
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user or final buyer of the item.
Wholesalers and dealers will require a sales tax number and a completed Kansas Resale Exemption Certificate (also referred to as a wholesale license, seller’s permit, or sales tax exemption certificate) to document that the purchased items are for resale.
Is a business license the same thing as a sales tax license?
No – A business license and a sales tax permit serve different purposes and are not the same.
A business license authorizes you to conduct business within a particular locality, ensuring compliance with local regulations. Conversely, a sales tax permit enables your business to legally collect sales tax on sales, which you then remit to the state government.
Generally, businesses require both a license and a permit to operate legally and handle taxes correctly.
If you have questions about the Business Tax License, the Kansas Department of Revenue has a guide to sales taxes in Kansas, or contact 785-291-3614.
