Stay up to date with sales tax: Join our mailing list!


The Kansas Department of Revenue has issued an opinion letter to a taxpayer inquiring about the sales tax implications if Congress fails to extend the Internet Tax Freedom Act (ITFA) beyond its current expiration date of October 1, 2015. The Department stated thatnothing would change.Kansas imposes sales tax on telecommunication services. The state’s relevant tax law’s definition of telecommunication service specifically excludes internet access service. As such, the state does not tax internet access services. A repeal of the ITFA would not affect the ongoing exemption of internet access services in Kansas. This guidance will remain in effect for at least 60 days after the Department publishes notice on its website indicating that Congress has repealed the ITFA and Kansas has taken steps to impose sales tax on internet access service.   (Opinion Letter No. O-2015-001, Kansas Department of Revenue, September 16, 2015)

(09/22/2015)

On June 15, 2015, Representative Jason Chaffetz (R-UT) introduced the Remote Transactions Parity Act (RTPA) of 2015 in the U.S. House of Representatives. The bill – similar to the Marketplace Fairness Act (MFA) of 2015 – pertains to sales and use taxcollection obligations for remote sellers, but the RTPA contains some differences and several additional provisions. Unlike the MFA’s $1 million small seller exception, the RTPA’s small seller exception is as follows: first year: $10 million; second year: $5 million; third year: $1 million. The exception goes away in the fourth year. Furthermore, under the RTPA sellers utilizing an electronic marketplace are not considered small sellers and are not entitled to the exception, no matter the year. Under the RTPA, sellers would not be audited by states where they don’t have a physical presence. There would be a three year statute of limitations for assessments on remote sellers. The bill would enable remote sellers to refund over-collected tax to customers. The RTPA also specifies that a state would not be authorized to impose a sales and use tax collection requirement on remote sellers until it has certified multiple software providers that are certified in all states seeking to impose authorization requirements. The RTPA would also allow customers to pursue refunds of over-collected tax from remote sellers. However, RTPA does not preempt states from imposing sales and use taxes on remote sellers that do not have physical presence under this definition. It merely authorizes states to impose sales and use tax on remote sellers without a physical presence. Under the RTPA, if a seller has nexus under existing law, including Quill v. North Dakota, then the state may still impose a sales and use tax collection requirement.  The bill is assigned to the Judiciary Committee just like the MFA.  On July 1, 2015 it was referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law. (H.R. 2775, the Remote Transactions Parity Act of 2015)

 

UPDATE: This bill failed to pass during the 114th Congressional Session running from January 3, 2015 to January 3, 2017.  Therefore, this bill has died and would need to be reintroduced to be considered and voted on.

(09/08/2015)

Kansas has enacted legislation that increases the state’s sales and use tax rate. Effective July 1, 2015, the Kansas state-level sales and use tax rate increases from 6.15% to 6.5%.

 

The Kansas Department of Revenue has issued guidance on how the new rate applies to transactions that begin before July 1, 2015 and end after July 1, 2015. The following transactions are subject to the new 6.5% state rate plus applicable local rates:

 

  • sales of tangible personal property delivered on or after July 1, 2015, even if ordered before July 1, 2015;
  • lease installment payments for periods starting on or after July 1, 2015;
  • rentals of tangible personal property of 30 days or less where a customer takes possession of the rental property on or after July 1, 2015;
  • money removed from vending machines on or after July 1, 2015;
  • sales of admission tickets on or after July 1, 2015;
  • dry cleaning returned on or after July 1, 2015
  • goods upon which installation, application, maintenance, or repair services were performed and that are returned on or after July 1, 2015, or that are otherwise available for use by the customer on or after July 1, 2015;
  • charges for catering performed on or after July 1, 2015;
  • membership dues covering periods beginning on or after July 1, 2015, regardless of the date the bill is issued to or payment is made by the member;
  • for monthly periodic billing of taxable utilities, the first customer billing period that begins on or after July 1, 2015. (For the last billing period that starts in June and ends on or after July 1, 2015, the invoice is subject to the 6.15% rate and the service provider can choose to charge the 6.5% rate for services billed as line-item charges on or after July 1, 2015); and
  • taxable hotel occupancy charges for stays after the morning of July 1, 2015

 

For contractors who have entered into a written, binding contract before May 1, 2015, for the original construction, reconstruction, restoration, remodeling, renovation, repair, or replacement of a building, facility, or residential structure or for the construction, reconstruction, restoration, replacement, or repair of a bridge or highway, the state-level sales tax on the contract must be remitted at the 6.15% rate in effect prior to the July 1 state-level increase to 6.5%, provided the contractor gives notice and proof of the contract to the Director of Taxation by July 10, 2015. (H.B. 2109 and S.B. 270, Laws 2015, effective as noted; Notice 15-02, Kansas Department of Revenue, June 22, 2015)

 

(07/06/2015)

Kansas has enacted a tax amnesty tax program that will take place from September 1, 2015 to October 15, 2015. Penalties and interest will be waived for taxpayers who pay delinquent taxes in full. The amnesty program applies to the following taxes: privilege, income, estate, cigarette, tobacco products, liquor enforcement, liquor drink, mineral severance, state sales and use, and local sales and use taxes. The amnesty program applies only to penalties and interest on liabilities associated with tax periods ending on or before December 31, 2013. The amnesty program does not apply to any matter for which, on or after September 1, 2015, taxpayers have received notices of assessment or for which an audit had previously been initiated. Fraud or intentional misrepresentation in connection with an amnesty application voids the application and waiver of any penalties and interest.

 

For more information, you can visit the state's amnesty program web page.

 

(H.B. 2109 and S.B. 270, Laws 2015, effective July 1, 2015, and applicable as noted)

(06/26/2015)

On March 10, 2015, a bipartisan group of senators introduced the Marketplace Fairness Act of 2015. Similar legislation – the Marketplace Fairness Act of 2013 – was previously introduced in February 2013 and passed by the Senate on May 6, 2013. That legislation failed to be enacted. If passed, the Marketplace Fairness Act of 2015 would authorize states meeting certain requirements to require remote sellers that do not meet a "small seller exception" to collect their state and local sales and use taxes. For more information on the previous legislation, visit Federal Government Introduces New Remote Seller Bill. (Marketplace Fairness Act of 2015, March 10, 2015)

 

UPDATE: This bill failed to pass during the 114th Congressional Session running from January 3, 2015 to January 3, 2017.  Therefore, this bill has died and would need to be reintroduced to be considered and voted on.

(03/16/2015)

Pages

Scroll to Top