In Kansas a sales tax is levied upon the gross receipts from the following:

• retail sales of tangible personal property
• telephone or telegraph services
• furnishing gas, water, electricity, and heat
• sale of meals or drinks at private, or public businesses
• sale of admissions to any place providing amusement
• coin-operating devices dispensing tangible personal property, amusement, or services (except laundry services)
• rentals of rooms by hotels
• the renting or leasing of tangible personal property
• dry cleaning, pressing, dyeing, and laundry services (except laundry services rendered through coin-operated devices)
• washing and waxing vehicles
• subscriber radio and television services
• sales to contractors, subcontractors or repairmen of materials and supplies for use in building, improving, altering, or repairing property for others
• fees and charges by private and public clubs, organizations, businesses, and political subdivisions of Kansas for participation in recreational activities
• isolated or occasional sales of motor vehicles or trailers
• installing or applying tangible personal property that is not held for sale in the regular course of business
• repairing, servicing, altering, or maintaining tangible personal property associated with realty and is not held for sale in the regular course of business
• fees or charges made under service or maintenance agreement contracts
• sales of canned computer software and services of modifying, altering, updating, or maintaining computer software
• telephone answering services
• sales of electricity, gas, and water that is essential to or used in the actual qualified production process
• sales from the service of renting rooms by an accommodations broker

Sales and use tax rate. The Kansas sales and use tax rate is 5.3 percent. (In addition, make sure you contact your local governments in Kansas because they are allowed to assess a local sales and use tax.)

Tax-exempt items. Kansas has many specific items that are exempt from sales tax — for example, certain prescription medications are exempt from Kansas sales tax. You'll want to check and see if you are exempt from the sales tax.

Responsibility for paying sales tax. In Kansas the sales tax is imposed upon the purchaser and paid to the seller. The seller is responsible for collecting and remitting the tax. Sales tax is a debt owed to the retailer by the purchaser until paid. Either the amount of tax on a sale must be separately stated on the invoice or billing, or the invoice or billing must bear the statement, "All applicable sales tax is included." If this requirement is not met, it will be presumed that the tax was not collected by the retailer.

Use tax. In Kansas the use tax supplements the sales tax. The use tax is levied upon people that are using, storing, or consuming in Kansas any article of tangible personal property that has not been subjected to sales or use tax by any state. Thus, the use tax is also referred to as the "compensating tax."

Responsibility for collecting use tax. The responsibility of the use tax is upon the consumer. The use tax is also a debt from the purchaser to the retailer.

Obtaining tax permits in Kansas. In Kansas all retailers and persons furnishing taxable services must secure certificates of registration. The certificates of registration are required for each place of business and obtained from the Kansas Director of Taxation.

Leases. The total amount of each rental or lease payment for tangible personal property is subject to sales tax. Lease or rental includes all transactions under which a person secures the use of tangible personal property for a consideration. A lease that is treated as a sale for federal income tax purposes is treated as an installment sale for sales tax purposes. However, in Kansas if the transaction is treated as a loan or financing transaction for federal income tax purposes it is treated as a loan or financing transaction for sales tax purposes.

The following discussions address additional sales and use tax issues that many small business owners face:

• sales and use tax obligations of a purchaser
• sales and use tax obligations of a seller