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Kansas enacted legislation that amends the sales and use tax exemption for tangible personal property and services purchased for the purpose of the construction, reconstruction, enlargement, or remodeling of a business or retail business meeting the requirements of the Kansas Enterprise Zone Act (KEZA). The legislation also amends the sales and use tax exemption for sales and installations of machinery and equipment purchased for installation at any such business. The amendments provide that project exemption certificates previously issued by the Kansas Department of Revenue under KEZA before January 1, 2012 that haven’t expired will be effective for the term of the project or for two years from the effective date of the certificate, whichever is shorter. Project exemption certificates submitted to the department before January 1, 2012 and that are found to qualify will be issued a project exemption certificate effective for two years or for the term of the project, whichever is shorter. (S.B. 196, Laws 2011, effective July 1, 2011)

(04/20/2012)

The Kansas Department of Revenue issued an opinion letter discussing the sales tax treatment of charges for hosted software services billed to Kansas subscribers. The application service provider (ASP) charges subscribers for the use of software hosted on the ASP’s remote servers, located out-of-state. Subscribers access the software via the internet. This type of transaction is commonly referred to as “Software as a Service” (SaaS) or cloud computing. In this instance, no software was downloaded or delivered to the customer, and title to the software did not pass to the subscribers. In Kansas, charges imposed by an ASP for using software on a remote server are not considered charges for a lease and are not subject to sales tax. The department noted that Kansas law applies sales tax only to services expressly described under Kansas law as subject to sales tax. None of the taxable services enumerated in Kansas law can be construed as hosted software services. The department also stated that charges for hosted software services are not subject to Kansas sales tax as sales of prewritten computer software because the software installed on the server (regardless of whether the server is located in Kansas or out-of-state) is not delivered to subscribers or installed on their computers. Such software is not taxable as a sale of prewritten software as long as the software is not billed to subscribers as a separate line item charge. (Opinion Letter No. O-2012-001, Kansas Department of Revenue, February 6, 2012)

(03/26/2012)

Kansas has enacted a tax amnesty program for delinquent payment of certain taxes administered by the Department of Revenue. The tax groups covered are sales, income, withholding, privilege, severance, estate, liquor, cigarette, and tobacco products. Amnesty applies only to unpaid tax liabilities for tax periods ending on or before December 31, 2008. The amnesty period began September 1, 2010 and will run through October 15, 2010. Interest and penalties will be dismissed if the tax liability is paid within this period. Certain liabilities that exist on or after September 1, 2010 are not eligible for amnesty including any audits in progress or already assessed. Participants in the amnesty program will relinquish all administrative and judicial rights of appeal in regard to the tax liability. Any tax payments received in relation to the amnesty program are not eligible for refund or credit. Payments of penalties or interest made before September 1, 2010 are not eligible for amnesty. (S.B. 572, Laws 2010, effective as noted; E-mail, Kansas Department of Revenue, August 12, 2010). (9/10)

(09/13/2010)

As a result of Senate Bill 430, the Kansas Department of Revenue (KDOR) has released a notice announcing that businesses will be required to electronically file returns for retailer’s sales, compensating use, and withholding tax, effective July 1, 2010. To ensure a smooth transition for Kansas businesses the KDOR will continue to provide paper forms as needed through September 30, 2010. After September 30, 2010, KDOR will no longer have printed paper forms available.

There are two options for electronic filing and payment:
1) The WebTax system: http://www.webtax.org; can file single and multiple jurisdiction sales and use tax returns. Requires users to create a login ID and password; a one-time use of a personal identification number (PIN) is required. For retailers’ sales and compensating use tax, it can be used to file single and multiple jurisdiction returns for FORM ST-16, ST-36, CT-9U, and CT-10U. For withholding tax, the system can be used to file Forms KW-3, KW-5, W-2, and 1099.
2) The TeleFile system: can file single jurisdiction sales tax returns. This telephone method requires the use of a PIN each time it used. For retailer’ sales and compensating use tax, the telephone number is (877) 317-5639 and the system can be used to file single jurisdiction returns for Form ST-16 only. For withholding tax, the telephone number is (877) 600-5640 and the system can be used to file Form KW-5 only.

For PIN assignment, taxpayers can call the Electronics Services at 1-800-525-3901 (in Topeka, call 296-6993) or if preferred, taxpayers can email Electronic Services at eservices@kdor.state.ks.us. Payments are made through EFT transfer (ACH Debit or ACH Credit) on or before the due date. Credit card payments are also accepted through third-party vendors. Additional rules and regulations apply. (New Filing Requirements for Your Retailers’ Sales, Compensating Use, and Withholding Tax, Kansas Department of Revenue, May 21, 2010)

(06/10/2010)

Kansas Governor Mark Parkinson has signed House Bill 2360 enacting the increase to the state’s retailers’ sales and compensating use tax rate from 5.3% to 6.3%, effective July 1, 2010. The Kansas Department of Revenue has recently revised a state and local rate change notice to reflect this rate increase. (H.B. 2360, Laws 2010, effective July 1, 2010; Press Release, Kansas Gov. Mark Parkinson, May 27, 2010; Information Guide No. EDU-96, Kansas Department of Revenue, June 2, 2010)

(06/08/2010)

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