Economic nexus laws by state: Kansas
by May 20, 2024
Please note: This blog was originally published in 2021. It’s since been updated for accuracy and comprehensiveness.
State laws on economic nexus vary and it’s hard to keep up if you’re doing business in multiple states. We’ve done the research for you and here’s all the information you need to know about economic nexus in Kansas.
What is economic nexus in Kansas?
With the South Dakota v. Wayfair Supreme Court ruling in favor of South Dakota, states are free to pursue sales tax from e-commerce businesses who have a “significant presence” in their state.
Significant presence or “nexus” was previously defined as having a physical presence (ex: brick and mortar store, employee, or inventory in a fulfillment center like FBA). But with this recent ruling, now this definition has been expanded to include economic activity in a state as well. This concept of triggering sales tax responsibility because of your economic activity in a state is now referred to as economic nexus.
Most important, this means that if you pass a state’s economic threshold for total revenue in that state and/or number of transactions in that state, you’re now legally required to register, collect and remit sales tax for that state.
Prior to May 2021, Kansas had no exception for small sellers, meaning there was no revenue threshold. This meant that all remote sellers, regardless of their total sales, were required to register with the state and start collecting and remitting taxes beginning October 1, 2019.
Further, there is a conflicting opinion from the Attorney General due to the unique nature of this legislation, so sellers will want to monitor this law closely in order to see if it lifts to a higher requirement or is overturned. As it stands now, the Department of Revenue is still requiring out-of-state sellers to remit sales tax. Here is the DOR’s response to the Attorney General.
Check back to this blog to see if or when the state makes any changes.
What’s the threshold for economic nexus law in Kansas?
- State: Kansas
- Threshold: As of July 1, 2021, remote e-commerce sellers who fit the following criteria are considered to have Kansas economic nexus:
- More than $100,000 of cumulative gross receipts from sales to customers in the state for the period of January 1, 2021, through June 30, 2021 or
- More than $100,000 of cumulative gross receipts from sales to customers in the state during the current or immediately preceding calendar year
- Summary: Kansas requires that e-commerce sellers, or marketplaces, who meet their new criteria register for a Kansas sales tax permit and begin collecting sales tax when making sales to buyers in the state of Kansas.
- Full text: You can read guidance on the text of Kansas economic nexus law here.
When did this Kansas law go into effect or is it planned?
As of July 1, 2021, remote e-commerce sellers who fit the following criteria are considered to have Kansas economic nexus:
- More than $100,000 of cumulative gross receipts from sales to customers in the state for the period of January 1, 2021, through June 30, 2021 or
- More than $100,000 of cumulative gross receipts from sales to customers in the state during the current or immediately preceding calendar year
I meet the economic threshold requirement in Kansas. Now what?
Here’s a quick checklist of what to do next:
- Register for a sales tax permit in Kansas
- Choose a technology like TaxJar to help you manage multi-state compliance.
- Connect TaxJar once to all of the places you sell
- Ensure all your e-commerce channels are setup correctly to collect sales tax
- Enroll in AutoFile and tell us how often you need to file
- Relax, you now handled your sales tax exposure. We’ll handle the rest for you.
Can you help me register for a sales tax permit?
Certainly! TaxJar offers these two options:
- Read our do it yourself instructions for every state
- Visit our registration page to request TaxJar manage your Kansas registration for you
Who can handle my Kansas sales tax filings for me?
At TaxJar, we help more than 20,000 sellers manage their sales tax needs every month. We help your business save on submitting your returns with our automated filing service called AutoFile. Read more about how AutoFile can handle all of your returns in as many states as you’d like.
I’ve met this threshold in Kansas, now where can I ask questions?
We recommend speaking with a vetted sales tax expert to answer specific questions for your business.
I’m selling to Kansas buyers. Will TaxJar help me track nexus?
Yes! With TaxJar’s Economic Nexus Insights Dashboard, you can see where your business currently has nexus, where your business is approaching nexus, and recommended next steps on how to begin complying with sales tax in all states.
Proactive notifications let you know when you’re approaching or have reached thresholds, so you can stay in front of any changes to your nexus requirements.
