Kansas Increases Sales and Use Tax Rate

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)