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Kansas, Internet Sales Tax and Fairness

  • Mar 12, 2012 | Susan McLain

Kansas has begun the process of moving Senate Bill 371 (SB 371) through the legislative process. SB 371 is “AN ACT concerning sales and use taxation; relating to nexus; amending K.S.A. 2011 Supp. 79-3702 and repealing the existing section.” In other words, an Internet sales tax bill. How is the Kansas bill worded?

According to Kansas SB 371, a retailer in Kansas means:

“Any retailer having or maintaining in this state, permanently, temporarily, directly or indirectly through a subsidiary, agent or representative, an office, distribution house, sales house, warehouse or other place of business.”

This definition and other parts of the bill mean that Internet retailers with warehouses or affiliates would now be required to consider their affiliate or warehouse evidence of nexus in Kansas. However, this doesn’t quite count as an Amazon law, since “Amazon.com, which has warehouses in Kansas, currently collects and remits” in Kansas.

At least one local municipality agrees with the bill but also encourages pursuing a national solution. “The City of Lawrence strongly supports Congressional action to collect mandatory sales taxes on all goods – purchased locally or through the Internet. The Kansas Legislature should urge congressional action on this key portion of tax fairness.”

Testimony was heard before the Senate Committee on Assessment and Taxation in late February. American Booksellers Association Board Member Sarah Bagby of Watermark Books & Café in Wichita, Kansas testified. She told the Committee, “Every day I have customers come into my store, ask for my expertise, and then take the information and purchase the product online so they can ‘save’ in sales tax. This is not just happening to me but it is happening to business owners throughout the state of Kansas.”

In a letter dated February 20, 2012, Grover Norquist, President of Americans for Tax Reform, wrote, “If history is a guide, the measure will put Kansas Internet advertisers out of work, fail to raise revenue for the state, and perpetuate whatever unfair tax playing field currently exists.” His letter indicated his strong opposition to Kansas Senate Bill 371.

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”