Kansas Tax Nexus
Businesses with nexus in Kansas are required to register with the Kansas Department of Revenue and to charge, collect, and remit the appropriate tax.
Generally, a business has nexus in Kansas when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.
Kansas nexus for out-of-state sellers
If your business has ties to businesses in Kansas, including affiliates, it may have nexus. An out-of-state retailer is presumed to be doing business in Kansas if any person, other than a common carrier acting as such, that has nexus with Kansas makes taxable retail sales of goods or services in the state and does any of the following:
- Sells the same or a substantially similar line of products as the retailer and does so under the same or a substantially similar business name
- Maintains a distribution house, sales house, warehouse or similar place of business in Kansas that delivers or facilitates the sale or delivery of property sold by the retailer to consumers
- Uses trademarks, service marks, or trade names in the state that are the same or substantially similar to those used by the retailer
- Delivers, installs, assembles or performs maintenance services for the retailer’s customers within the state
- Facilitates the retailer’s delivery of property to customers in the state by allowing the retailer’s customers to pick up property sold by the retailer at an office, distribution facility, warehouse, storage place or similar place of business maintained by the person in the state
- Has a franchisee or licensee operating under its trade name, if the franchisee or the licensee is required to collect the tax under the Kansas retailers’ sales tax act
- Conducts any other activities in the state that are significantly associated with the retailer’s ability to establish and maintain a market in the state for the retailer’s sales
An out-of-state business can also establish nexus in Kansas through referrals from in-state entities, including online referrals, when both the following are true:
- The retailer enters into an agreement with one or more residents of Kansas under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or an internet website, by telemarketing, by an in-person oral presentation, or otherwise, to the retailer
- The cumulative gross receipts from sales by the retailer to customers in the state who are referred to the retailer by all residents with this type of an agreement with the retailer is in excess of $10,000 during the preceding 12 months
See S.B. 83 and Kansas Department of Revenue Notice 13-05.